New Indonesian power plant to be delayed

Land acquisition issues have pushed completion back by one year.

The US$4 billion project to build a 2,000 megawatt coal fired power plant in Batang, Central Java is expected to begin commercial operations expected by 2017.

Bhimasena Power Indonesia, a consortium that comprises Japanese J-Power and Itochu and Indonesia’s Adaro Power, won the tender to build the plant.

Land acquisition was supposed to be completed in October 2012 after the announcement of the winning tender, while the project’s financial closure was expected within another six months. It has now been extended to October 2013.

Acquisition of the 226 hectares land required for the plant is currently 80% complete, but completion of the remaining 20% may last until October.

The plant is expected to provide high-efficiency power generation and reduce PT PLN’s electricity generation costs, as coal is cheaper than the diesel many of PLN’s plants still rely on.

The Batang plant is expected to supply electricity for PLN’s Java customers and any interference over its completion will cause a big gap in the future electricity supply for Indonesia.