PLN says it needs US$11 billion to construct new power plants
Saturday, March 25 2006 - 01:27 AM WIB
State electricity company PT PLN needs to invest between US$10 billion, and $11 billion on the construction of new power plants to provide additional capacity of 3,300 megawatts (MW) within the next two-and-a-half years, according to the firm?s president Eddie Widiono as quoted by The Jakarta Post on Saturday.
Speaking to reporters on Friday after the presentation of an ?ISO 14001:2004 certificate to Siemens Indonesia for its environmental management system at the Muara Tawar plant in Bekasi, Eddie said that PLN was considering tapping the bond market to help finance the projects.
?The construction of the plants, which will be coal-and natural gas-fired, has to be completed by 2009 to meet the increasing demand for electricity and simultaneously reduce our reliance on oil,? he said.
Indonesia currently operates a number of oil-fired plants with a total, capacity of 8,900 MW These burn about 9 million kiloliters of oil worth Rp 45 trillion per year.
Eddie said the cost of oil was far higher than the Rp 5 trillion to Rp 7 trillion that it would cost to fire plants of the same capacity with coal.
He said that besides the plants to be built by PLN, the, company would also invite private sector investors to build other plants with a total capacity of 8,300 MW within the same two-and-a-half-year timeframe. This would increase the country?s power generation capacity by 11,600 MW by 2009.
Most of the plants to be built by the private sector would be coal-fired, while the remainder, would be fired by natural gas. He said that it had been decided to limit, the number of gas-fired plants given that the gas supply could be reduced as more factones turned to gas from oil.
The construction of the new plants was essential to boosting the firm?s efficiency following the government?s decision to cancel a proposed electricity price hike, he said.
PLN had, earlier demanded price increases to cover its deficit.
President Yudhoyono has confirmed that the government and the House of Representatives will revise the budget to provide PLN with an additional subvention of about Rp 10.2 trillion to cover its mounting deficit. This is on top of, the Rp 17 trillion subvention already allocated to the company in the budget. (*)