Local content for power plant projects to reach 40%

In a bid to support the manufacturing industry, the government is to source components needed for the construction of the planned 35,000-megawatt (MW) power plants from domestic manufacturers, The Jakarta Post reported Friday.

The paper quoted Coordinating Maritime Affairs Minister Indroyono Soesilo as saying the move would support the domestic manufacturing industry.

The minister said that local engineering and procurement companies (EPCs) had been given the green light to participate in the projects, whose investment was expected to reach more than Rp 1 quadrillion (US$79 billion).

?In an effort to increase local content, we have agreed to support the national industry as much as possible,? Indroyono said on Thursday.

He added that the government would issue a regulation enabling the formation of a technical team to aid EPCs and independent power producers (IPPs) in the construction of power plants to meet the 35,000-MW target by 2019.

The minister said the government would impose a 40-percent minimum for local content on certain power plants in accordance with regulations.

Industry Minister Regulation No. 54/2012 on local content use for electricity infrastructure stipulates that, for instance, power plants under 35 MW will have to maintain a local content of 60 to 70 percent, and 30 percent for generators over 100 MW. (*)