PLN to spend up to Rp 50 trillion for investments next year

State owned electricity company PLN plans to allocate up to Rp 50 trillion (about US$5.2 billion) in new investments next year, up from about Rp 48 trillion this year, Kontan reported on Friday.

?Total investment for next year will range between Rp 46 trillion and Rp 50 trillion. The final decision will be made in the first week of January,? PLN?s President Director Nur Pamudji said in Jakarta on Wednesday.

He said that the new investments would be financed by internal funds, loans and the government?s financial assistance. According to him, the larger part of the investments would be used to finance projects related to the conversion of oil to cheaper energy such as gas, coal and renewable energy.

?We are trying to reduce the use of oil by operating more coal-fired power plants,? Pamudji said, adding that the company?s oil conversion program would result in the increase in the use of coal and gas in the next few years.

This year, PLN estimates coal consumption will reach 57 million tons. About 39.6 million tons of the total will be used by PLN?s own power plants, and 12 million tons by power plants owned by PLN?s subsidiaries and the remaining 5 million tons by power plants owned by independent power producers (IPPs).

The contribution of coal in PLN?s fuel use is expected to reach about 51 percent. This year, oil accounts for about 13 percent of the total energy use, and the number will be further cut down to 4 percent in 2014.

During the first semester of this year, PLN had used about 18 million tons, 30 percent higher than those in the same period, last year. (*)