Landslide halts operations at Kencana Energy’s Pakkat hydropower plant

By Romel S. Gurky

Hydropower developer PT Kencana Energi Lestari Tbk (IDX: KEEN) has temporarily shut down operations at its 18 MW Pakkat hydropower plant in North Sumatra after a landslide struck the project area on 3 December, the company said in a disclosure to the Financial Services Authority (OJK).

The landslide occurred at around 14:30 WIB in Pakkat District, Humbang Hasundutan Regency. The company confirmed that no fatalities or injuries resulted from the incident.

Kencana Energy said it is conducting a detailed investigation with relevant authorities to assess operational impacts. The hydropower facility, which operates under a 30-year BOOT agreement with PLN following its commercial start-up in January 2018, will remain offline during the assessment.

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The company said there is no legal impact from the incident and that its financial exposure is still being evaluated. However, it noted that no penalties will be imposed by PLN, as Pakkat’s output prior to the incident had reached nearly 100% of the agreed energy commitment, and the event is classified as force majeure under the power purchase agreement.

Kencana Energy also stated that all Pakkat assets are fully insured, including coverage for business interruption.

Pakkat is one of four operating hydropower plants in its portfolio, with the remaining facilities continuing to run normally.

The Pakkat plant, developed and operated by subsidiary PT Energy Sakti Sentosa, uses a run-of-river design drawing from the Aek Sirahar watershed. The plant’s capacity was increased from 10 MW to 18 MW after PLN approved an expansion in 2017.

Editing by Alexander  Ginting