PTBA, Partners seeks more loan to develop mine-mouth power plant

State-owned coal mining company PT Tambang Batubara Bukit Asam (PTBA) and partners are seeking additional loan from China Development Bank to meet an increase in the construction costs of the company?s Bangko Tengah 4 x 660 MW mine-mouth power plant in South Sumatra.

PTBA?s director for operation Milawarma said in Jakarta on Thursday that China Development Bank had committed to providing loan worth US$2 billion to finance the coal-fired power plant.

?The construction costs which were initially estimated at about US$2 billion might swell to up to $2.4 billion due to the surging costs of the construction materials. The discussion will be started after electricity price, which will be sold to state electricity firm PLN being finalized,? he said.

?The Chinese bank may team up with local banks," he said.

The government has decided to delay the construction of the power plant until 2012 in order to avoid an oversupply in the power production in the province.

According to the minister, the power plant would remain the government's priority but its construction would be carried out after 2009 or in 2012 in order to avoid an oversupply.

PTBA owns a 28 percent stake in the project, with China Huadian owning 55 percent, PT Indika Energy about eight percent, PLN eight percent and the local administration-owned company BUMD Sumsel owns the remaining one percent. (*)