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Government to sign off on Batang power plant financial closure

  • Anton Hermansyah
    Anton Hermansyah

    The Jakarta Post

Jakarta | Wed, June 8, 2016 | 06:36 pm
Government to sign off on Batang power plant financial closure President Joko “Jokowi” Widodo and his entourage inspect a 2,000-megawatt coal-fired power plant construction site in Batang, Central Java, on Aug. 28, 2015. (JP/Suherdjoko)

President Joko "Jokowi" Widodo will sign off on the financial closure for six infrastructure projects, comprising the Batang coal-fired power plant in Central Java and five toll road projects around the archipelago on Thursday at the Presidential Palace after a one-day delay.

The signing ceremony was initially scheduled to be held at the Office of the Economic Coordinating Minister on Wednesday, but Energy and Mineral Resources Minister Sudirman Said said Jokowi had changed the day and the venue to the Presidential Palace.

"The President called and instructed us to delay the ceremony until tomorrow and to hold it at the Presidential Palace," he said on Wednesday.

The US$7.69 billion worth of infrastructure projects was guaranteed by the government through the Indonesia Infrastructure Guarantee Fund (IIGF).

The five highway projects are the Manado-Bitung toll road in North Sulawesi, the Balikpapan-Samarinda toll road in East Kalimantan, the Terbanggi Besar-Pematang Panggang-Kayu Agung toll road in Lampung and South Sumatra, the Pandaan-Malang toll road in East Java and the Serpong-Balaraja toll road in Banten.

The Batang power plant, touted as the largest in Southeast Asia, is part of Jokowi's ambitious plan to add 35,000 MW to the electricity grid by building multiple power plants.

Construction of the $4 billion coal-powered plant was initially earmarked to begin in 2012 and be commercialized in 2019. However, the community near the site protested the plan on environmental grounds.

Many have refused to sell their property to make way for it. Farmers who refused to give up their land have reported cases of intimidation and blocked access to their homes.

The project was awarded to Bhimasena Power Indonesia, a joint venture between Adaro Energy, Japan's Itochu Corporation and the Electric Power Development Co., Ltd (J-Power).

Bhimasena secured a $3.4 billion loan for the project from a consortium of nine Japanese banks, of which $2 billion came from the Japan Bank for International Cooperation (JBIC).

"With this we can reassured the consortium that the chance in Indonesia is still available. Despite slow but there is progress," Adaro president director Garibaldi "Boy" Thohir told thejakartapost.com.

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