Adaro Energy, Japanese Firms To Build $3.2b Power Plant

From Jakarta Globe.

A consortium of Indonesian and Japanese firms has won a contract to build coal-fired power plants in Central Java, the nation’s utility provider said on Wednesday.

Indonesian coal miner Adaro Energy, Japanese trading house Itochu Corp. and Japanese electricity company Electric Power Development Co., which is also known as J-Power, will build the $3.2 billion project, said Dahlan Iskan, the president director of state utility provider Perusahaan Listrik Negara.

The project is part of the first phase of the government’s “fast-track” program to add 10,000 megawatts of electricity to PLN’s power grid.



PLN had targeted an additional 10,000 MW by this year, but the program, which started in 2007, has only produced an additional 4,000 MW.

“The Adaro consortium won the tender, but the official announcement will come in mid-June,” Dahlan said. The official announcement is expected on June 17.

Adaro’s consortium was the only one of the four qualified bidders that passed its technical evaluation, Dahlan said. It also submitted the lowest bid among the other competitors.

The other three bidders were Japanese trading company Marubeni Corp.; China’s largest coal producer, China Shenhua Energy Company; and a consortium between China National Technical Import Corp. and Guangdong Yudean Group.

The project, which involves building two coal-fired power plants with capacity of 800 to 1,000 MW in Pemalang, Central Java, will receive the government’s guarantee through Penjaminan Infrastruktur Indonesia. The state-owned company will act like an insurance company, compensating investors for losses caused by policies that hurt their investments.

PLN said in a statement on Wednesday that the power purchase agreement would be signed on Aug. 31 and a guarantee scheme would follow. Commercial operations are expected to begin in 2017.

The statement also said the plant would use “supercritical” technology that would include higher efficiency and lower carbon emissions compared to PLN’s existing coal-fired power plants.

Dahlan said PLN expected to add 4,500 MW of electricity to its grid by the end of this year and another 1,000 MW by 2013 as it tries to keep up with the fast-track program. Indonesia’s power grid has 31,000 MW of available power to supply the nation’s 240 million people with electricity.

In April, PLN opened tenders for seven coal-fired power plants with a total capacity of 1,650 MW to help meet growing power demand outside of Java island. The plants are expected to begin operating by 2013.