Indonesias electricity firm inks US 2bn deal for coal power plant

Indonesias electricity firm inks US 2bn deal for coal power plant

Indonesia’s state-run electricity distributor has signed a tentative deal with a US-led consortium for the construction of a coal-fired power plant costing up to two billion dollars, an official said.

Indonesia’s Perusahaan Listrik Negara (PLN) signed a memorandum of understanding (MOU) with the consortium led by AES Transpower Ltd for the 1,200 megawatt plant to be built in South Sumatra, PLN president Eddie Widiono said.

The consortium will be responsible for supplying the coal and building the power plant, said the ministry of energy’s director-general for geology and mineral resources, Simon Sembiring.

Both officials were speaking late Wednesday in the sidelines of a major infrastructure investment forum. The project was not among those on offer to foreign and domestic investors.

Power generated by the plant will be purchased by PLN.

Widiono said construction of the plant may cost 1.2 billion dollars but if the mining equipment was included, the total cost could reach two billion dollars.

“This is an integrated project,” he said.

The AES consortium includes AES Transpower, Japan’s Sojitz and local firm PT Triaryani.

Separately, PLN spokesman Mulyo Adji said construction of the project is expected to take three years from the signing of a contract.

Rising demand for electricity has led to increasing numbers of blackouts across Southeast Asia’s largest economy in the past few years despite the huge archipelago’s vast resources of oil, natural gas and geothermal energy.

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