PLN tightening selection of IPPs

State-owned electricity company PT Perusahaan Listrik Negara (PLN) is tightening selection of companies applying for licenses to become independent power producers (IPP) to ensure that they have no difficulties in financing their power projects, Kompas reported on Thursday.

PLN?s Director for Planning Bambang Praptono said in Jakarta on Wednesday that many companies which got licenses to operate as IPPs in the past had failed to provide financing for their projects.

?In the past, the tender committee lacked experiences. No wonder if many companies which won the tender were financially incompetent,? he said.

At present, PLN is tightening the evaluation process so that all companies given licenses to operate as IPPs would be both technically and financially credible, he said. In addition, IPPs would be also required to have a local content of at least 70 percent to ensure that the construction of private power plants could also benefit local industries.

?It means that 70 percent of the components for the construction of the private power plants should be manufactured by local companies,? he said. At present, the power projects only benefited Chinese and Japanese industries, Bambang added. (*)