President issues new regulation to accelerate power infrastructure development
Tuesday, February 28 2017 - 02:53 AM WIB
Petromindo
President Joko Widodo has issued new Presidential Regulation No 14/2017, which is a revision of Presidential Regulation No 4/2016, on the acceleration of electricity infrastructure development, Kontan reported on Tuesday.
The paper said that the new regulation will further strengthen the role of state-owned electricity firm PT PLN in power sector development including helping to realize the government?s five-year program to develop a combined 35,000 MW power plants.
According to the new regulation, cooperation between PLN and other entities in electricity infrastructure development has been expanded to include power plants, transmission, distribution, sub-station and other supporting facilities. The previous presidential regulation limits the cooperation between PLN and other entities to power plant and transmission projects.
The government will also provide incentives for PLN in the development of electricity projects including allowing PLN to utilize land allocated for other infrastructure facilities such as roads, gas pipeline, and railways.
To help ensure electricity supply, cooperation between PLN and other entities is made through sale and purchase transaction instead of lease transaction. PLN is also allowed to cooperate with domestic and overseas companies in the electricity projects, but PLN must have majority stake of not less than 51 percent.
The paper quoted Spokesman of the Ministry of Energy and Mineral Resources Sujatmiko as saying that the new presidential regulation will strengthen the role of PLN in the development electricity infrastructure projects in the country. ?This will help PLN in developing distribution network, substation and other supporting facilities,? he said.
Executive Chairman of the Indonesian Independent Power Producers Association, Arthur Simatupang said that while the new presidential regulation will strengthen the role of PLN, he fears that it could potentially slowdown electricity projects as it would depend on PLN?s financing capacity. (*)