Purchase price of power by PLN to be raised by 25%

The government will increase the ceiling price of electricity sold by independent power producers (IPPs) to state-owned power company PT PLN by about 25 percent as part of incentives to help accelerate power sector development, Vice President Jusuf Kalla said.

Kalla was quoted by Bisnis Indonesia as saying that power sector is crucial to help accelerate economic growth in the Southeast Asia?s largest economy.

He added that aside from increasing the electricity ceiling price, the government will also make direct appointment, instead of tender process, on contractors for the development of the 35,000 MW power plants, in a bid to accelerate the development of the key projects.

The government of President Joko Widodo has set an ambitious target of developing a combined 35,000 MW power plants over the next five years. Of the total target, IPPs are expected to build 25,000 MW. (*)