PLN, Shenhua to seal S. Sumatra IPP deal

China?s biggest coal miner China Shenhua Energy will sign deal with State electricity firm PLN to build a 2x300MW mine-mouth power plant in Simpang Belimbing, South Sumatra on December 22, PLN President Fahmi Mochtar said on Tuesday.

Fahmi said Shenhua would be directly appointed to operate and owned the power plant, which will be operated would operate under Independent Power Producer (IPP) scheme.

?Government regulation allows PLN to appoint mine-mouth power plant without tender,? Fahmi said, adding that under Power Purchasing Agreement that would be signed, Shenhua would sell the entire electricity generated from the project to PLN lower than the maximum average price of 4.28 US cents per kwh allowed by government regulation.

Fahmi said the power plant would start operations in 2011.

According to PLN?s Chief Commissioner Al Hilal Hamdi, electricity generated from the power plant would be utilized to meet chronic electricity deficit in South Sumatra area.(godang)