Indo Ridlatama, PLN sign new PPA

Power developer PT Indo Ridlatama Power signed on March 20 a new power purchasing agreement (PPA) with state utility PLN to allow the former company to resume construction of a stalled 2x27.5 MW coal fired power plant in East Kalimantan.

?Within six months after this date, Indo Ridlatama Power will have to make financial closing so that the project can effectively progress,? said PT Indonesia Power, a subsidiary of PLN, in a statement late last week.

Indo Ridlatama is a joint venture between Indonesia Power (81 percent) and private owned PT Ridlatama Bangun Mandiri (19%) set up in 2005 to build the 2x27.5 MW mine mouth power plant to help increase electricity supply in East Kalimantan. But the firm only signed the PPA with PLN in 2007.

However, after the global economy fell into a crisis in 2008, and prices of key materials such as steel, cement and fuel have risen since 2005 when the assumptions for the first PPA were made, Indo Ridlatama and a dozen of other power producers sought for a revision in the PPA with PLN to make adjustment for the change in the construction costs.

Elsewhere, Indonesia Power said in the statement that to distribute the electricity to be produced from the 2x27.5 MW mine mouth power plant to the Mahakam power system in East Kalimantan, Indo Ridlatama must develop a 150 KV transmission facility. Construction process, however, is foresee to meet obstacles including a crossing problem with the Senipah-Bukuan line, and land acquisition problem.

To help resolve the problems, a coordination meeting was held on March 25 between Indo Ridlatama and related parties. The parties then agreed to hold followed up meetings in the future.

Editing by Reiner Simanjuntak