PLN wants Dieng power selling price set at 4.2 U.S. cents per Kwh

The state-owned electricity company PLN wants the Dieng geothermal power plant in Central Java to sell its power at 4.2 U.S. cents per Kwh to make the project profitable for the company, according to PLN president Eddie Widiono.

Eddie, however, added that the 4.2 U.S. cents per Kwh price was only feasible if the government accepted PLN?s other terms including expanding the project capacity to 3x80 MW from 1x60 MW, and allowing the company to prioritize in repaying obligation to foreign lenders during the first 13 year, while debt to the government would be repaid only after 14 years with interest rate not more than 3 percent.

PLN and the state-owned oil and gas firm Pertamina will resume the development of the Dieng power project and another similar one called Patuha power project in West Java, which were stopped by the government in the wake of the 1997 financial crisis. The suspension had forced the government to pay US$260 million compensation to U.S.-based OPIC which insured the projects, and another $140 million to lenders.

The government is enthusiast to immediately complete the projects so that revenue from them could be used to pay the claims.(Arry)