Medco to start construction of Sarulla geothermal power project next year

Publicly listed energy firm PT Medco Energi Internasional Tbk plans to start the construction of Sarulla geothermal project in North Sumatra next year, a company official said Thursday.

?We expect to sign an agreement with PLN (state-owned electricity company) on Sarulla power project in the near future, so that we can start the construction stage next year,? said Medco?s corporate secretary Andy Karamoy.

Medco-led consortium is developing a combined gross capacity of 340 MW geothermal power project, owning and operating the facilities and selling electricity to PLN under a 30-year Power Purchase Agreement (PPA). The project will cost about US$600 million.

Japanese trading house Itochu Corp. and the U.S.-based manufacture company Ormat International Inc are the members of the consortium.

PLN earlier announced that it would transfer the geothermal project to the consortium following the resignation of the winner of project PT Geo Dipa, a joint venture of PLN and state oil and gas company PT Pertamina, due to difficulties in raising funds. (godang)