Paiton Energy?s move expected to encourage more investments in Indonesia

Friday, February 1 2002 - 10:24 AM WIB

State electricity firm PLN said on Friday it expects more independent power producers (IPP) to enter the country?s power production sector following Paiton Energy?s plan to build new power plants near its current projects in Probolinggo, East Java.

Company president director Eddie Widiono said with more power projects carried out by Paiton Energy and other independent power producers (IPP), the price of electricity supplied to PLN could be reduced from the current US$4.8-4.9 cents as widely demanded by its customers.

Eddie said however it has yet to offer Paiton Energy to build the additional power plants.

Earlier reports said Paiton Energy, the owner of the coal?fired Paiton I power plant in Probolinggo was still exploring the possibility of building one or two additional power units in the area as part of its expansion program.

?Paiton has agreed with PLN to look into this development,? said Paiton energy president Ronald P. Landry.

Meanwhile, Eddie told reporters on Friday: ?The new projects offered to Paiton would encourage it to reinvest it capital. The positive impact of Paiton Energy?s move will be other private investors feeling encouraged to enter our power sector.?

Recently, PLN and Paiton Energy and PT Jawa Power, which operates Paiton II plant, reached preliminary agreements for long-term rates for power. PT PLN agreed to pay them $4.8-4.9 cents a kilowatt-hour for power from their plants. Final settlement of the rates was expected in three to four months, they said.

Paiton Energy is jointly owned by Edison Mission Energy which is a unit of Edison International, Japan?s Mitsui & Co and local partner PT BHP. (*)

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