PLN gets $100 million loan from China

State-owned electricity company Perusahaan Listrik Negara (PLN) has obtained a US$100 million loan from China, which was part of a $400 million credit which was given to Indonesia, Bisnis Indonesia newspaper reported on Monday.

?From this money, $80 million will be used to develop the Parit Baru power plant in South Kalimantan and the rest for the Labuhan Angin power plant in North Sumatra, PLN president director Eddie Widiono told Bisnis after attending the ASEAN Business Investment Summit in Nusa Dua, Bali.

All the preparations have been made for the building of Labuhan Angin power plant and the contract of work (CoW) as well as the loan agreement will be signed today (Monday), Eddie said.

?As far as the Parit Baru power plant is concerned, the contract of work will be signed at the end of the year, he added.

The loan is a part of PLN?s efforts to finance the development of new power plants with an estimated cost of around $22 billion to $28 billion until 2010 in order to meet the growing demand in the country.

PLN needs an investment of $1.25 billion -- $770 million for generators, 170 million for transmission and 311 million for the distribution-- for this year alone. PLN will fund around 40 percent of the investment and the rest will be through loans and the production sharing contractors.

The Java-Bali power grid alone would need an additional supply of 12,000 megawatts (MW) until 2010.

Eddie mentioned that the government would cover the development of power plants with a capacity of 5,000 MW, while private investors were expected to build their own plants to cover the remaining of the new demand. (*)