Truba, Shanghai Electric to jointly build power plant in N.Sumatra

Publicly listed engineering and electricity company PT Truba Alam Manunggal (Truba) and Hong Kong-based Shanghai Electric Group have agreed to jointly build and operate a coal-fired power plant in Kuala Tanjung, North Sumatra.

Under the memorandum of understanding (MoU) signed in Jakarta Thursday, the two companies would build a US$200 million coal fired power plant with a capacity of 2x125 MW.

President director of Truba Arifin Wiguna said that the construction of the power plant which would cost about US$200 million would be started in January next year so that the new power plant would be able to begin commercial operation in 2008.

He said that the power to be produced by the new power plant would be sold to state-owned electricity company PLN in a bid to cope with the shortage of power supply in the province.

"We have reached an initial agreement with PLN on the price of the power. The price will be about US$4.5 cent," he said, adding that the final agreement would be signed soon.

According to him, about 30 percent of the total funds needed for the construction of the power plant would be financed by the company's own funds, with the remainders to be sourced from local banks.

Earlier, Truba and Shanghai Electric Import & Export Company Ltd have signed a MoU with PT Centralpertiwi Bahari to build a US$60 million coal fired power plant with capacity 2x25 MW in North Lampung. (godang)