IPPs urge PLN to review electricity prices

A number of independent power producers (IPPs) which are currently building new power plants have demanded state owned electricity company PLN to review their selling prices following the surge in bank lending rates.

PLN's president Eddie Widiono said in Jakarta on Thursday that the increase in the lending rates to about 18 percent per annum would consequently result in the increase in the construction costs of the new power plants.

"The IPPs has asked PLN to review their selling prices because most of the power purchase contracts were based on interest rates of about 12 percent," Eddie said.

According to Eddie there are at least 14 power projects now under construction in partnership with PLN, and all of the contractors of these power projects have asked an adjustment in their selling price contracts.

The new power projects, which are mostly located outside Java, have a generating capacity ranging from six to 25 MW. (dino)