Power sector needs $3 billion investment every year

State-owned electricity company PT Perusahaan Listrik Negara(PLN) expects the new government to work hard to lure badly needed new investment in the electricity sector amid rising threat of power shortage in the country, Bisnis Indonesia daily reported on Thursday.

The paper quoted PLN secretary Muldjo Adji as saying that the power sector needs around US$3 billion in new investment per year to cope with electricity demand growth of 6 percent per year.

He said that the new government should launch measures to boost investors confidence and improve investment climate in the country's power sector among others by providing security and ensuring legal certainty.

Currently investors, including in power sector, have been waiting for the new government policies.

“There is already a positive market sentiment in case of portfolio investment in the capital and bond markets and hopefully this will spread to the real sector so that the foreign direct investment can enter into the country,” he said.

"Investors are still adopting a wait and see approach. We can see this in the power sector," Muljo said.

He gave the examples of financial institutions like Asian Development Bank and the Japan bank for International Cooperation have been waiting since last year to invest in several power plants in North and Central Sulawesi and Gorontalo provinces.(*)