PLN to buy electricity from Indian firm's power plant

State owned electricity company PLN has agreed to buy electricity from independent power producer Madhucon Project Ltd of India, which will build a coal-fired power plant in South Sumatera, Kontan business daily reported on Wednesday.

Under the power purchase agreement signed in Jakarta on Tuesday, PLN will buy electricity from Madhucon at US$0.058 per kilowatt hour (kWh).

According to the plan, a joint venture between Madhucon Project and PT Madhucon Indonesia will build a coal-fired power plant with a capacity of 2 x 150 MW in South Sumatera. The joint venture will spend at least $455 million to build the power plant which will be called PLTU Sumsel-7.

The joint venture expects to obtain loans from Bank of India to partly finance the project.

?We hope the construction of the new power plant could begin soon so that it will be able to support power supply for South Sumatera,? PLN President Director Nur Pamudji said after the signing of the power purchase agreement.

PLN also said it would soon auction three more mine-mouth power plants in South Sumatera to independent power producers, namely PLTU Sumatera Selatan 9 with a capacity of 2 x 600 mw, PLTU Sumatera Selatan 10 with a capacity of 1 x 600 MW and PLTU Jambi with a capacity of 2 x 400 MW.

The three power plants are expected to begin commercial operation in 2016. (*)