Business

Abandoned geothermal project
in Patuha hots up

The government will resume  development of a previously abandoned geothermal power plant at Patuha in Bandung, West Java.

“This project must continue as it’s been abandoned for nearly 12 years and the government has paid around US$400 million to the US,” vice president Jusuf Kalla said after a meeting at the plant on Tuesday.

The meeting was attended by state oil and gas company president director Karen Agustiawan, Energy and Mineral Resources Minister Purnomo Yusgiantoro, State Minister for State Enterprises Sofyan Djalil and state utility company PLN president director Fahmi Moechtar.

“I expect Pertamina to finish the first phase of the project, which will provide about 60 megawatts of electricity, by the end of 2010. The initial investment for this first phase is around $80 million and state banks will provide the funding,” Kalla said.

The government has appointed state lender Bank Negara Indonesia (BNI) as the fund arranger for the power plant project, according to the proposal provided during the meeting.

“The power plant will be able to provide around 360 MW of electricity upon completion by 2015,” he added. By then, up to $380 million in investment will be needed, according to the proposal.

The management on the development of the power plant will be handled by PT Geodipa Energi (GDE), a Pertamina subsidiary.

Former president B.J. Habibie halted the development of the plant in the late 1990s because of suspicions of corruption. It was one of ten similar projects halted by President Habibie in that period.

Himpurna California Energy, a US investor group owning the rights on the Patuha power plant project at that time, then demanded the Indonesian government pay their investment losses which they claimed amounted to $400 million.

The geothermal power plant in Patuha, along with a similar power plant in Dieng, West Java, will be part of an ambitious program of projects under the government’s second 10,000 MW power program.

This ambitious power program focuses on generating electricity using mostly environmentally friendly energy sources such as geothermal,  hydro and wind. (hdt)

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