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AKARTA: A subsidiary of publicly listed coal producer PT Bukit Asam (PTBA), PT Huadian Bukit Asam Power, signed an agreement on Monday with state electricity company PT PLN on a power purchase deal.

Under the agreement, Huadian Bukit Asam Power will supply electricity of 2 by 620 megawatts for 25 years to PLN, which will then distribute the power to Sumatra, Java and the Bali area.

Huadian Bukit Asam Power, which is 45 percent owned by PTBA and 55 percent by China Huadian Hongkong Limited, won a bid last year to a build coal-steamed power plant called South Sumatra 8 (PLTU Sumsel 8) in Tanjung Enim, Sumatra. The company will start building the plant next year with total investment reaching US$1.59 billion.

“PTBA is optimistic that PLTU Sumsel 8 will be completed by the end of 2016 and start operations at the beginning of 2017,” PTBA said in a written statement.

Prior to the agreement, Huadian Bukit Asam Power also inked a coal supply agreement with PTBA. Under the agreement, PTBA will supply 5.4 to 6 million metric tons of coal per year. The agreement will last for 25 years.