PLN needs $18.9 billion to cope with power supply shortage

PLN?s subsidiary PT Indonesia Power estimates that until 2010, Indonesia will need at least US$18.9 billion in new investment in coping with the acute shortage of power supply in the country, Bisnis Indonesia reported on Thursday.

President of Indonesia Power, Firdaus Akmal, said in Jakarta on Wednesday that the electricity supply should be increased by about 25,300 MW by 2010 from only 23,000 MW at present to meet the demand which was estimated to reach 48,300 MW. The total investment needed to meet the demand would reach about US$18.9 billion.

"From this we can see that the business opportunities in power generation are still widely open. The value of power plants which should be built to meet the demand in next 10 years could reach US$18.9 billion," he told reporters in a sideline of a seminar on electricity. He added that the Java and Bali power transmission alone would need at least US$5.8 billion to meet the demand in 2010.

The investment funds would be needed for the development of power resource, construction of power plants and their maintenance, he said, adding that the development of power resource, which usually take one to two years, would require between five to 10 percent of the total funds.

"The investment fund for the construction of a power plant will reach between US$0.9 billion to US$1.9 billion," he was quoted as saying.

Meanwhile the director of power development of Power Indonesia, Djuwarno, said that the funds needed for the requirement of machinery equipment and electricity control facilities varied depending on the power generation systems used by an investor.

"For steam power or combined cycle power plants, the cost for the procurement of such facilities could reach between 60 to 70 percent of the total investment fund, while those for a hydro power plant would account for about 30 to 40 percent," he added. (*)