PLN expects more investors to follow ABB-led consortium

The state electricity company PT PLN said on Tuesday the involvement a consortium led by Zurich-based ABB in Indonesia?s power sector may encourage others to follow suit.

?We hope that they will pave the way for others to come in. Their move means lenders have regained confidence in the strength of PLN and our electricity sector,? PLN President Director Eddie Widiono told reporters after a hearing with the House commission for energy and mineral resources.

The ABB-led consortium signed in December a contract worth about 71 million euros (US$65 million) with PLN to build a 309-kilometer power line on the main island of Java. The line is part of the extension of the 500 KV ultra-high voltage grid which is to link power plants in eastern Java to the cities of Jakarta, Bandung and Yogyakarta.

The Japan Bank of International Cooperation (JBIC) is financing the project.

Eddie said the completion of the electricity law will also encourage more investors to enter the country?s power sector in the coming five years. He expects that the deliberation of the draft law on electricity at the House of Representatives will be finished soon.

The government?s achievements in negotiations with independent power producers will also be another factor which will attract more investors to come in, Eddie added. (leo)