Sumitomo gets approval for Tanjung Jati B expansion

Japanese firm Sumitomo Corp and state owned electricity firm PT Perusahaan Listrik Negara (PLN) have reached agreement to build the planned expansion of the Tanjung Jati B coal fired power plant in Central Java.

Sumitomo plans to double the capacity of Tanjung Jati B to 2,640 MW from 1,320 MW at present.

?The office of State Minister of State Enterprises has approved of the plan, therefore the construction of the power plant can be started,? Director General of Electricity at the Ministry of Energy and Mineral Resources J. Purwono said on Friday.

The investment is expected to be around US$1.2-1.5 billion. Most of the funds will be provided by Japan Bank for International Corporation (JBIC) and the rest by foreign or Indonesian banks, he said.

The construction will be started in early 2009 and is expected to be completed in the next three years.

Sumitomo, through its wholly-owned unit PT Central Jawa Power will sell the electricity to PLN at the price of $4.3 cent per kwh. ?Next week, the power purchase agreement (PPA) for the project will be signed,? he added. (Bernard)