Medco ready to start construction of Sarulla power plant
Monday, February 18 2013 - 02:35 AM WIB
Medco has formed a consortium called PT Sarulla Operation Limited (SOL) to build the geothermal power plant which will have a capacity of 3 x 110 megawatt. The consortium comprises of Medco Power, Kyushu Electric, Itochu Corporation Inc, and Ormat International.
Medco Power?s President Director Fazil E. Alfitri said in Jakarta last week that the consortium would this month sign two agreements to pave the way for the construction of the power plant.
One of the agreements would be an energy sales contract which will be signed with PT PLN as the buyer of the electricity to be produced from the power plant. The other one will be a joint operation contract between the consortium and PT Pertamina Geothermal Energy as the owner of the geothermal power field.
He said that if the construction could be started this month, the first unit of PLTU Sarulla, which will become Asia?s largest power plant, would be able to begin operation in the middle of 2014. The second and third units of the power plant are expected to begin operation in 2015 and 2016.
The geothermal power plant would be initially built in 2007 but it was delayed because the consortium was unable to use the power plant?s assets as the collateral to secure the loan.
In order to solve this problem, the energy and mineral resources ministry, the finance ministry and state enterprises ministry issued recently a joint decree to allow the consortium to pledge the power plant?s assets as the loan collateral. (*)