Investor ready to take over PLN's debt to OPIC

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Monday a certain investor had voiced interest to take over state electricity company PT PLN's debt to the United States government-owned insurance firm the Overseas Private Investment Cooperation (OPIC).

Purnomo said the investor asked to take over the power plant projects insured by the insurance firm in return.

"This proposal is being studied by the government team (handling PLN's problems," Purnomo told reporters after the House of Representative's plenary session to officially present the oil and gas bill.

Purnomo refused to name the investor.

"It's confidential," Purnomo said.

OPIC has asked PLN to reimburse it for US$260 million in insurance claims, which it has paid to American independent power producer (IPP) MidAmerican Energy Holding.

MidAmerican, which was in the past known as CalEnergy, received the insurance claims from OPIC following an international arbitration ruling favoring the company in its dispute with PLN.

MidAmerican brought PLN to arbitration following the state company's refusal to pay it for power supplies from its geothermal power plant in Dieng, Central Java and the suspension by the government of its geothermal project in Patuha, West Java.

PLN, heavily battered by the economic crisis, has failed to pay power supplies from many private companies, including MidAmerican. The government has also suspended many power projects as part of belt-tightening efforts to cope with the economic crisis. (Godang)