The grid will include 40 kilometers of underwater power cables passing through the Sunda Strait, PLN planning and technology director Bambang Praptono said Thursday.

“The grid will be used to transmit power from Sumatra to Java so that, in future, we won’t need to build big power plants in Java,” Bambang said.

The cables will transmit power produced by six coal-fired plants in South Sumatra to PLN’s distribution channels in West Java.

Bambang said the six power plants would produce a total 3,600 megawatts (MW) of power.

Of the 3,600 MW, up to 3,000 MW will be transmitted to Java through the grid, with the remaining 600 MW to be supplied to PLN’s Sumatra system, he added.

Bambang said PLN would open a tender for the project in mid-2010, adding he expected the project construction would begin in 2011.

“We expect the project to be completed in 2016,” he said.

Eighty percent of the required investment will come in the form of a loan from the Japan International Cooperation Agency (JICA), and the remaining 20 percent will be financed by PLN.

Bambang said the JICA loan was a soft loan with a maturity period of 40 years, including a grace period of 10 years.

The interest on the loan is set at 0.3 percent, he added.

PLN maintains a monopoly on electricity distribution in the country, but a recently passed electricity law stipulates private companies, previously limited to power generation, will be allowed to enter the distribution business.

Power management has been one of the main factors blamed for hampering Indonesia’s economic growth, with frequent blackouts common across the country.

Nationally, only 65 percent of the country’s territory is connected to PLN’s grid, most of it in the country’s more developed western islands.

Only 45 percent of eastern Indonesia is connected to the grid.

To address the imbalance, the company has been spending big on building large power plants, in the main island of Java and elsewhere.

PLN is currently rolling out two massive power generation programs, each to add 10,000 MW to the grid.

Under the first program, a total of 35 power plants are expected to be built, 10 of them in Java with 4,337 MW of output, while the rest, located outside the main Java—Bali system, will generate 5,626 MW.

Under the second program, 83 power plants will be tendered out, including 65 outside Java.

The first 10,000-MW program relies entirely on coal-fired plants.

The second 10,000-MW program will generate 12 percent of its power from hydroelectric plants, 48 percent from geothermal plants and 14 percent from natural gas plants, with the remainder from coal plants.

PLN plans to sell 144.52 terawatt-hours (TWh) of electricity this year, up from 127.42 TWh in 2008.

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