PLN remains reluctant to develop HDVC transmission project

The planned high voltage direct current (HVDC) transmission project linking Sumara and Java islands continues to be clouded by uncertainty as state-owned electricity firm PT PLN remains reluctant to develop the project as assigned by the government.

PLN President Director Sofyan Basir insisted that the HVDC project must be reviewed because it was planned during the 2004-2005 period. ?Now is 2016. So it must be reviewed,? he told Kontan on Tuesday.

He also opposed the use of loans to finance the project. Sofyan said that the infrastructure project should instead be subsidized by the government. ?If it is free we want (to develop the project), but we don?t want (to make) borrowing,? he said.

Uncertainty over the HVDC project would in turn create uncertainty for a number of coal-fired power plant projects such as the Sumsel-8, Sumsel-9 and Sumsel-10 mine mouth power plant projects in South Sumatra. IDX-listed coal giant PT Bukit Asam Tbk, in particular, has won tender to develop the Sumsel-8 project, whose output will be distributed to Java.

Meanwhile, Head of the National Electricity Development Program Implementing Unit (UP3KN) Agung Wicaksono said that the HVDC project has been included in the recently approved 2016-2025 electricity procurement business plan (RUPTL), which means that according to the regulation, PLN must implement the project.

He added that the government has signed a loan agreement with Japan International Cooperation Agency (JICA) to finance the HVDC project. Kontan said that JICA has agreed to provide a 30-year loan worth US$2.13 billion to finance the project. (*)