T

he Investment Coordinating Board (BKPM) has promised to help a number of large-scale power projects worth Rp 146.59 trillion (US$11.38 billion) that have been stalled for many years due to licensing problems.

BKPM deputy for investment planning Tamba Parulian Hutapea said the stalled power projects consisted of 10 power plant construction projects with a combined capacity of 8,768.46 megawatt and a transmission project with a capacity of 500 kilovolts.

The 10 power projects '€” mostly coal-fired power plants '€” are located in Sumatra: North Sumatra, Jambi, Riau, Bengkulu, South Sumatra; Central Java; South Sulawesi and Bali, according to Tamba.

'€œThe investors have encountered various problems, such as land availability and borrow-to-use permits for forest areas. We are trying to address whether the problems are related to the domain of central or regional administrations,'€ he said in Jakarta on Wednesday.

As part of the efforts, Tamba said the investment board would use the solution applied for the Batang power plant in Central Java to settle the problems encountered by the 11 power projects.

The $4 billion Batang power plant, which has a 2x1,000 MW capacity, has been delayed for years due to land-acquisition problems. The power plant will be built by PT Bhimasena Power Indonesia, a consortium established by coal firm Adaro Energy subsidiary Adaro Power with Electric Power Development Co. Ltd. (J-Power) and Itochu Corp.

Construction of the Batang power plant is expected to start in March following a revision to a Presidential Regulation (Perpres) on land acquisition for infrastructure-development projects. The new regulation is expected to resolve land-acquisition disputes with local residents.

The BKPM took over in January the Energy and Mineral Resources Ministry'€™s responsibility of issuing licenses for companies looking to operate in the electricity and mineral sectors following its transformation into a one-stop licensing service.

Private investment in the electricity sector is needed to help the government achieve its five-year term goal of 35,000 MW. If combined with around 7,000 MW worth of projects in the pipeline, the total target will reach over 42,000 MW.

Of that target, state-owned electricity firm PLN will develop around 18,000 MW while the remainder will be developed by independent power producers (IPPs).

IPPs are generally involved in the production of electricity through either coal-fired, geothermal or other forms of power plants.

They will sell their electricity to PLN, which is in charge of power distribution in the country.

Tamba said the BKPM had issued permits for 13 companies to operate as IPPs through its One-Stop Integated Services (PTSP) between Jan. 13 and Feb. 9. They will build power plants in several regions in the country with a combined capacity of 265.6 MW at a total cost of about Rp 5.4 trillion.

According to Tamba, foreign companies, such as from South Korea, as well as local ones are on the list, but that '€œtheir names cannot be disclosed now because they have yet to break ground and some of them probably are listed companies in their countries that should declare every corporate action'€.

'€œSome of the 13 companies will be engaged in renewable energy, such as mini-hydro power plants. One of the projects will be located in Banten,'€ Tamba said.

Tamba further said that as of now, at least 20 other investors from Indonesia as well as countries, such as China, India and Japan, had shown interest in investing in the electricity sector.