PLN saves $5.2 billion from renegotiations of contracts

The state electricity company PLN had managed to save between US$4.52 billion and US$5.28 billion from the renegotiations of the power purchasing agreements (PPA) with a number of independent power producers (IPPs), Neraca daily reported on Tuesday.

PLN president director Eddie Widiono said in Jakarta on Monday that 10 IPPs had agreed to lower the prices of the electricity that should be bought by PLN by between 18 percent and 35 percent.

According to Eddie the largest contribution from the cut in the power purchasing contracts was made by the investors of steam power PLTU Tanjung Jati B, representing between US$537.81 million and US$1.29 billion.

"But nominally, the largest cut was made from renegotiations with Paiton I, totaling US$1.93 billion," he added.

At least 10 IPPs have agreed to cut their PPA agreements, including PLTP Darajat, which agreed to cut the price contract by US$188.52 million or 35 percent, PLTGU Sengkang (US$122.79 million or 25%), PLTD Pare Pare (US$25.6 million or 24%), Paiton II (US$865.15 million or 19.52%), PLTP Salak (US$472.6 million or 24.5%), PLTU Amurang (US$89.3 million), PLTU Sibolga (US$142.5 million or 18.1% and PLTGU Palembang Timur (US$144 million or 25%).

The contracts resulted from the renegotiations would be used as reference for the future contracts with IPPs, Eddie said, adding that PLN was preparing the reopening of new power contracts including with those which have already signed the IPPs.(*)