JBIC sets two requirements to resume Tanjung Jati B power project

Japan Bank for International Corporation (JBIC) has set two requirements to resume the construction of Tanjung Jati B power project in Jepara, Central Java. One of the requirements is that the government should provide liquid assets as the guarantee of the project while the other one is that the government should free imports of the equipment to be used for the project, Bisnis Indonesia reported on Wednesday.

"JBIC?s requirements are being negotiated by Minister of Finance," Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Tuesday. He added that the negotiations should be soon settled to ensure that the giant power project would be able to operate in 2005 as scheduled.

The minister said that the power plant, which would gave a generating capacity of 1,230 MW would be needed to cope with the possible shortage in the electricity supply in Java and Bali. "If the project is delayed, PLN would have to spend much money either to boost the capacity of the existing plant or to build new plant," he said.

Meanwhile PLN?s president director Eddie Widiono said that that if the project could be carried out as expected, it would be completed within 36 months. "We therefore will try our utmost efforts to complete the negotiation process with JBIC if not we have to spend a lot of money to build a new power plant," he said.

According to him, if Tanjung Jati B power plant could not be operated according to schedule, PLN should build a new power plant with capacity of 600 MW to meet the surge in the electricity demand. "To build a new plant PLN would need at least RP 1.5 trillion," he added.

The Tanjung Jati power project is one of the country?s large-scale power projects which were delayed due to the government?s retrenchment program to cope with the economic crisis which hit the country late in 1997. The project located in Jepara, Central Java is 60 percent completed.(*)