Govt mulls giving tax incentives to geothermal investors
Friday, June 30 2006 - 09:07 AM WIB
The ministry?s geothermal director Sugiarto said on Friday that the proposal was contained in the governmental regulation on geothermal resources already drafted by the ministry.
He said geothermal resource was unique in nature due the fact it is unmovable and could only be used to generate power ? as such the only buyer of the commodity is state electricity company PT Perusahaan Listrik Negera (PLN). In view of the limited buyer, investors need tax incentives to boost their earnings.
The ministry proposes in the draft governmental regulation that geothermal power investors be exempted from import tariff and sales tax.
?We have finished the draft regulation and have sent it to the State Secretariat for review and approval,? Sugiarto said.
Indonesia has an abundant geothermal resource that is able to generate more than 20,000 MW of power. Yet, today, the country?s geothermal power plants now only generate a total of 804 MW of power. Of the total, 165 MW is generated by the Drajat and Salak power plants in West Java owned by American energy firm Chevron Texaco, the rest from PLN? subsidiary and state oil and gas company PT Pertamina.
When asked about the interest of investors in the country?s geothermal resource, Sugiarto said publicly-listed company PT Medco Energi International and Chevron were among the companies that show interest to invest or continue investing in the sector.
While Medco is aggressively looking for geothermal fields across the country, Chevron is interested in further developing its existing geothermal field.
?Medco is interested in geothermal resource in Tangkuban Perahu in West Java and Maluku. And there is also an indication they (the company) is going to Aceh (to look for geothermal fields),? he said.
PLN recently announced it would award Medco with a contract to develop a geothermal power plant in Sarulla, North Sumatra. (Godang)