Jambi administration gets 15% stake at Kerinci power plant

State electricity company PT PLN has handed over the development of water-powered 350 megawatt Maringin power plant in Kerinci district in the province of Jambi to PT Kerinci Tirta Energi, a joint venture of PLN, Statkraft SF of Norway, PT Binatek Reka Energi and the Jambi administration.

The joint venture company was established under a memorandum of agreement (MOA) signed in Kerinci earlier this week by Jambi governor Zulkifli Nurdin, Kerinci regent Fauzi Si'in, PLN planning/distribution and marketing director Eddie Widiyono, Statkraft SF's representative in Indonesia Kjell Tore Laroi and PT Binatek Reka Energi president Erwin Jahja. The signing was witnessed by Norwegian Ambassador to Indonesia Sjur Torgersen.

Jambi governor Zulkifli Nurdin said that the Jambi provincial administration gets 15 percent stake for free in the joint venture company that would build the power plant.

"The granting of the stake makes the Jambi administration the first provincial administration in Indonesia that secures stakes ahead of the implementation of local autonomy (in year 2001)," Zulkifli said after the signing of the MOA.

Statkraft as the main investor in the project will share with PLN the same percentage of ownership in the project. Statkraft holds 35 percent stake in the project, so does PLN. And PT Binatek has 15 percent and the remaining 15 percent goes to the Jambi administration.

"In getting our 15 percent stake, the Jambi administration does not spend any money, but we give compensation in the form of lands for the project, water supplies and rocks as building materials," he said.

Eddie Wuryanto of PLN said that the US$500 million project actually belonged to PLN, but PLN tendered the project to private entity because PLN had financial constraints to build the project with its own funds.

Based on PLN studies, the Kerinci power plant was one of the projects that were environmentally ready to be implemented.

The project would consist of the building of dam and a 12-meter tunnel to supply water to power generators, and underground power generators with capacity of 350 megawatts.

The power plant would consume a maximum of 100 cubic meters of water per second, with water falling height of 410 meters. The power plant would produce 1,450 GWh of electricity per annum.

Eddie said the construction of the power plant would be conducted in seven stages. The project itself should commence next year. "Actually, according to our earlier schedules, the project construction should have started much earlier."

The plan to build the power plant itself was actually signed by PLN, Statkraft SF and PT Binatek Reka Energy on Oct. 16, 1996. However, because of the crisis and also because of the upcoming implementation of regional autonomy, investors then decided to invite the participation of the Jambi administration. (*)