PTBA ready to develop S. Sumatra 8 power plant, awaits LoI for HVDC transmission

IDX-listed coal mining firm PT Bukit Asam Tbk (PTBA) said it is ready to start construction of the planned South Sumatra 8 (or Sumsel 8) mine mouth power plant, but the company wants state-owned electricity firm PT PLN to first issue a letter of interest (LoI) for the planned high voltage direct current transmission (HVDC) that would link South Sumatra and Java islands, Kontan reported on Thursday.

The issuance of the LoI for the HVDC project is crucial to help ensure confidence of creditors in the planned 2x630 MW coal-fired power plant to be located in Banko Tengah, South Sumatra. ?We want the letter of interest not to be delayed because it affects investors confidence,? said PTBA President Director Arviyan Arifin as quoted by the paper.

PLN earlier planned to drop the HVDC transmission project from its 2016-2025 electricity procurement business plans (or RUPTL). But the government, after reviewing the RUPTL draft submitted by PLN to the Ministry of Energy and Mineral Resources earlier this week, demanded the utility firm to include the project in the RUPTL. PLN Director Supangkat Iwan Santoso said that PLN has now agreed to include the HVDC project after obtaining funding commitment from Japan.

Arviyan said that once PLN issues the LoI for the HVDC project, PTBA will immediately start construction of the South Sumatra 8 mine mouth power plant project to help meet the completion target in 2019.

PTBA is teaming up with China?s Huadian Group to develop the power plant project. The joint venture company called PT Huadian Bukit Asam Power has already completed acquisition of the required 103 hectares land for the project, which has obtained funding commitment among others from Bank of China. (*)