PLN must provide $100 million for Cilacap coal-fired power plant

State-owned electricity firm PT Perusahaan Listrik Negara must provide around US$100 million (Rp 850 billion) to

allow the construction of the Cilacap coal-fired power plant begins, according to a report.

The PLN funding was needed because the original developer of the project, PT Sumber Segera Primadaya, has not been able to obtain loan as planned, Koran Tempo daily said in its Thursday edition.

Previously, Bank of China and a private national bank have promised to finance this $510 million project.

A government source revealed to the Koran Tempo as per the original plan Bank of China will provide $410 million and a local private bank will fund another $100 million to build this 600 megawatt capacity power plant in Cilacap, Central Java.

“Unfortunately, the loan agreement is not yet signed. But the project has already been inaugurated by Minister of Energy and Mineral Resources Purnomo Yusgiantoro last December,” the source said on Wednesday,

To resolve the problem, PLN must spend $100 million so that the project work would be commenced.

But this payment would be a burden on PLN's finances, which in turn may affect its electricity charges.

Cilacap project was designed by PT Geo Dipa Energi, a venture between state-owned oil and gas company PT Pertamina and PLN, and PT Sumber Energi Sakti Prima. Later, PT Geo and PT Sumber formed another venture company called PT Sumber Segara Primadaya with a composition of 51 percent of ownership for Geo and 49 percent for Sumber.

After some time, Pertamina decided to quit from the project.

Meanwhile, PLN’s finance director told Koran Tempo that his company has already prepared $100 million for Cilacap power plant. (*)