Govt issues guarantee letter for Supreme geothermal power plants
Friday, March 2 2012 - 05:46 AM WIB
The Ministry of Finance on Friday issued the Government Guarantee Letter for two of Supreme Energy geothermal power plants, namely PLTP Muara Laboh located in South Solok Regency in West Sumatra and PLTP Rajabasa in South Lampung Regency.
The guarantee letter will pave the way for the company to commence the exploration activities in those two projects.
?The Guarantee Letter is provided pursuant to the Minister of Finance Regulation No. 139/PMK.011/2011 for PLN?s Business Viability,? Supreme Energy said in a statement distributed to media after the signing of power purchase agreement (PPA).
On the same day, PT Supreme Energy, International Power (IPR-GDF Suez Asia) and Sumitomo Corporation, through their joint investment operating companies PT Supreme Energy Muara Laboh and PT Supreme Energy Rajabasa, entered into two PPAs.
The PPAs are with the Indonesian state electricity company PT PLN for the sale and purchase of power from the Muara Laboh and Rajabasa geothermal power plants to be built on the Sumatera island and deliver electricity to the Sumatra grid.
Under the PPA, PLN will purchase electricity from PLTP Muara Laboh at a price of 9.4 cent US dollar per kWh and 9.5 cent US dollar per kWh from PLTP Rajabasa.
The two projects are included in the second fast track program of development of 10,000 ME of new generating capacity in Indonesia, in which around 4,500 MW should come from geothermal resources. The second fast track program was launched by the government in 2010.
PLTP Muara Laboh will consist of two units with capacity of 110 MW each, while PLTP Rajabasa will also consist of two units with capacity of 110 MW, said Supreme Energy.
In 2010, Supreme Energy, in consortium with GDF Suez, was declared winner of the concession (WKP) tenders for the Muara Laboh and Rajabasa resource areas. The geothermal mining licenses (IUP), which are valid for 35 years, were awarded respectively to PT Supreme Energy Muara Laboh and PT Supreme Energy Rajabasa, the companies that will develop the two geothermal power plants.
Supreme Energy President Director Supramu Santosa said after signing of the agreement that his company will immediately begin exploration activities in those two areas, including drilling few exploration wells with estimated cost of US$100 million for each project.
Editing by David Mustakim