RI needs more investment in power sector to meet demand beyond 2006
Saturday, October 4 2003 - 03:22 AM WIB
That’s why, the World Bank has asked the government to formulate adequate policies covering legal certainty, tariffs and investment guarantee to attract foreign investment in the electricity sector, which will be liberalized in 2006 as per the Electricity Law 2002.
This was disclosed by Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti on the sidelines of a closed-door meeting between the government and the World Bank, Asian Development Bank (ADB) and the Japan Bank for International Cooperation (JBIC) on the investment in the power sector in Jakarta.
“The result of the World Bank studies in the developing countries shows that we have to prepare ourselves to get the private investment in the power sector after 2006. It (World Bank) also reminded us to improve our negotiation skills in dealing with private investors,” Dorodjatun was quoted by Kompas and Antara as saying.
The World Bank has also asked the government to conduct a road show to Europe, U.S. and Japan to lure the investment.
Meanwhile, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Indonesia needs US$28 billion investment in the power sector for the period 2003-2010 in accordance with the estimates of the World Bank, ADB and JBIC.
The state-owned electricity company Perusahaan Listrik Negara (PLN) will manage the electricity supply well until 2006. After this, the country would need billions of dollars in investment to meet the rising demand, said PLN president director Eddie Widiono.
The Java-Bali power grid alone would need an additional supply of 12,000 megawatts (mw) until 2010.
Eddie mentioned that the government would cover the development of power plants with a capacity of 5,000 mw, while private investors were expected to build their own plants to cover the remaining of the new demand. (*)