PLN, IPPs sign power contracts of 9,403 MW

State-owned electricity company PT PLN and independent power producers (IPPs) have signed power purchase agreements (PPAs) for planned power plant projects with combined capacity of 9,403 MW, Bisnis Indonesia reported on Friday.

This represents about 37.6 percent of the government?s target to develop a total of 35,000 MW power plants until 2019, of which 25,000 MW would be developed by IPPs and the remainder by PLN. IPPs must first sign PPA with PLN before starting construction of a power plant project.

The paper quoted PLN Corporate Planning Director, Nicke Widyawati as saying that as per December 10, 2015, the company has signed PPAs with IPPs for projects covering a combined capacity of 9,403 MW. The initial target is to sign PPAs with combined capacity of 10,000 MW.

Nicke said that the company hopes to be able to exceed the target as it set to sign PPAs for a number of large coal-fired power plant projects.

She said that after the signing of the PPAs, the IPPs are given six months to make financial closing, and followed with ground-breaking of the projects.

IPPs which fail to meet the schedule risk their contracts be terminated, she added.

Nicke said that PLN hopes to be able to sign PPAs for much of the remaining power plant projects under the 35,000 MW program next year. (*)