Jokowi says 35,000 MW program open to revision

President Joko Widodo (Jokowi) said that the 35,000 MW power plant development program is open to revision if the country?s economic growth is lower than initially projected.

?If economic growth is not in accordance (with initial projection), there will be oversupply of electricity. So the target can be lowered from 35,000 MW to 32,000 MW,? Jokowi said at a groundbreaking ceremony of power plant projects in Banten on Friday.

He said that pushing ahead with the initial target will only create huge financial burden for state-owned electricity firm PT PLN, which is required to buy the power produced.

The administration of Jokowi has launched a five-year program to develop a combined 35,000 MW power plants through 2019. The project was based on economic growth assumption of 7 percent per year. But the country?s economic growth has been hovering at around 5 percent. Slower economic growth will slows down demand for electricity.

Minister of Energy and Mineral Resources Ignasius Jonan has recently said that only about half of the 35,000 MW target would be completed by 2019, while the other half would be completed from 2023 to 2025.

Minister of Finance Sri Mulyani Indrawati earlier gave a warning about PLN?s financial condition due to rising debt payment obligations at a time when its revenue has been undermined by slower power demand and government policy of not increase electricity tariff for consumers. The minister suggested for a rescheduling of the 35,000 MW program as part of measures to help ease the financial burden of PLN. (*)