Lack of guarantee hampers investment in electricity sector

Reluctance on the part of the government to provide a guarantee for an electricity project has discouraged investors to put their investment in the electricity sector, Neraca daily reported on Friday.

"The interest to invest in the electricity sector is quite encouraging but the investors have asked for a guarantee from the government," the president of the state owned electricity company PLN, Eddie Widiono was quoted as saying.

He said that in addition to old players, many new players from China and India have expressed their interest in the country's electricity sector but they could not immediately realize their investment plans due to the lack of the guarantee from the government.

According to him, the lack of the government's guarantee has become a major barrier in attracting new investment in the electricity sector. In addition, many investors were still studying the implication of the new electricity law on an electricity project.

He, however, said that within the next two years, the country's electricity sector would remain promising either for both local and foreign investors. "The improvement of the domestic economy will certainly encourage new investment in the sector," he said. (*)