Private sector money for new Indonesian power plants

Indonesia turns to the private sector to fund its new power plants.

PT PLN, the state-owned firm that monopolizes power distribution in Indonesia, has decided to partner with the private sector to build hydro power plants at Batang Toru in North Sumatra; Kerinci in Jambi and Karama in West Sulawesi.

PLN President Director Nur Pamudji said that since they require huge investments, “the projects will be given to private developers. The financing may come from foreign financial institutions, thus we suggest that the government provide guarantee through PT Penjaminan Infrastruktur Indonesia.”

All three projects will require an investment of US$2.9 billion. Karama will need US$$1.2 billion; Batang Toru US$1.2 billion and Kerinci, US$510 million.

The Karama power plant, to be built by PT Sulbar Group and China’s Gezhoumba Group, will have a total capacity of 450 MW. The 450 MW Kerinci power plant will be built by PT Kerinci Hydro Energy while Operational Cooperation (KSO) Dharma Hydro will build the 500 MW power plant in Batang Toru.