Govt will not provide guarantee to PLN?s power projects

The government will not give any guarantee to funding of 10,000 megawatt (MW) power plant projects. The entire funding will come from the corporate sources and investors.

State Minister for State Enterprises Sugiharto said that since there will not be any guarantee from the government for the loans obtained by the state electricity firm PT Perusahaan Listrik Negara (PLN), it will not be necessary to consult the budget committee of House of Representatives for the disbursement of loans to PLN.

?Because, if PLN fails to repay its loans, the money from the state budget will not be used to pay for the PLN,? Sugiharto said during a hearing with the House?s Commission VII in Jakarta.

Earlier the government has approved the fast-track construction of 19 coal-fired power projects worth US$8 billion over the next four years, with some of the projects to be excluded from a lengthy tendering process.

Under its ?crash start program?, the government has agreed to directly appoint several local contractors to quickly develop some of the plants through a power purchase agreement. The government hopes the plants will help prevent power shortages and cut the nation?s use of expensive oil-based fuels. (godang)