Indonesian PLN negotiating on funds

Indonesian state utility company PT PLN is facing financing problems with its first 10,000 MW crash program, so the Jakarta Post. The – so the article – “unsmooth partnership with the Chinese government as one of its biggest investors” has made it difficult to finance the program.

The first step of that program has run fast, “but there are some hindrances here and there due to financing problems.” The best option for sources of financing would be the local banking sector and there are so far no plans to seek loans from other foreign sources.

Launched in 2006 the 10,000 MW power program was launched to “meet the increasing demand for electricity nationwide, especially for the Java-Bali system. The program included 35 power plants, 10 of them in Java and Bali, while the remaining 25 were off the two main islands. So far contracts for 32 power plants have been signed, and most of these have now reached the construction phase.

PLN says the program requires US$8 billion in total, 85 percent of which is expected to come from local and foreign investors and 15 percent of which to be covered by PLN from its own resources.

While the first program only includes coal fired power plants, the second program (with an additional 10,000 MW), which is supposed to be completed by 2012, includes about 50% of geothermal.

Source: The Jakarta Post