Govt agrees to continue Tanjung Jati B power project

The government has finally agreed to continue the development of the Tanjung Jati B coal-fired power project in Central Java ahead of a key Consultative Group on Indonesia (CGI) donors meeting in Jakarta this week, the Koran Tempo daily quoted a source as saying.

The source said that the agreement was reached after Finance Minister Boediono approved the proposed financial lease scheme for the project. Boediono is the last minister in the so-called Keppres 133/2000 team which decides on the fate of the stalled project. Under the scheme, the government will not have to inject fresh funds for the project.

It is not clear, however, whether the selling price of electricity from the Tanjung Jati B had been agreed. Earlier reports said that the proposed selling price was between 4.2 U.S. cents and 4.3 U.S. cents kilo-watt hour.

The 2x660 megawatt Tanjung Jati B project is controlled by Japan?s Sumitomo Corp. and PT Hopewell Impa Power. The Japanese government is the country?s largest creditor in the CGI forum.(*)