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tate-owned power company PT PLN will need additional funds of up to Rp 4 trillion to finance two new power plants included in its 10,000-megawatt (MW) power-generation scheme.

The two plants are the 2x200-megawatt plants in Riau and East Kalimantan, PLN president director Fahmi Mochtar told reporters Thursday.

"We've included the two power plants in the 10,000-MW project so that their financing can be guaranteed by the government," he said, adding a new presidential regulation would be issued to include the two plants in the project.

He said each plant would require Rp 2 trillion (US$210 million), adding potential lenders had been found.

"The development banks in the two provinces have expressed their commitment to financing the power plants," Fahmi said.

"That's why we've included them in the 10,000-MW generation program."

Since the 1997-1998 Asia financial crisis, there has been no significant investment in power plant construction in the country.

As the result, PLN's current power capacity cannot meet the ever-increasing demand for electricity, causing power deficits and frequent blackouts across the country, in particular in areas outside the main Java-Bali power grid.

Demand for electricity increases by about 7 percent every year, mostly within the main grid.

The 10,000-MW program includes more than 30 existing and planned power plants. The program initially required total funding of Rp 19.2 trillion and $4.8 billion.

PLN says it has so far secured 90.7 percent of the needed financing in dollar-denominated loans and 98.2 percent in rupiah-denominated loans.

Besides the Rp 4 trillion for the two power plants in Riau and East Kalimantan, PLN still needs another $500 million and Rp 2 trillion for five other power plants within the project.

The five are in Tanjung Awar-Awar ($372 million and Rp 1.1 trillion); Balai Karimun ($7 million and Rp 71 billion); Bangkalis ($8 million and Rp 132 billion); Riau ($9 million and Rp 111 billion) and Parit Baru ($62 million and Rp 300 billion).

In addition to this project, the government and PLN are set to launch a second-phase 10,000-MW power-generation program.

The second program will generate 12 percent of its power from hydroelectric plants, 48 percent from geothermal plants, 14 percent from gas-fired plants, and the remaining 26 percent from coal-fired plants.

This program is expected to generate up to 10,580 MW of electricity in total. Of this capacity, 5,685 MW will be pumped into the Java-Bali grid, and the remaining 4,895 MW will go to the rest of the country.

PLN says the project will require $10 billion just for the construction of the power plants, and even more for transmission installment costs and other items.

Under the second 10,000-MW power-generation program, 83 power plants will be tendered, 65 of them outside Java.