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RI finally ready to commence Batang mega project
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A security officer escorts a protester holding a poster opposing the Batang power plant at the Office of the Coordinating Economic Minister, where a financial closure ceremony was slated to take place, on Wednesday. The ceremony was subsequently held at the State Palace on Thursday. ( Antara/Sigid Kurniawan)
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fter several delays, President Joko "Jokowi" Widodo witnessed the financial closure of Asia’s largest power plant project during a ceremony at the State Palace on Thursday.
With the financial closure, the construction of the coal-fired power plant in Batang, Central Java, with a capacity of 2 x 1,000 megawatts (MW), can finally commence. The facility is scheduled to be ready for operation in 2019.
The plant is part of Jokowi’s ambitious plan to add 35,000 MW through power plants within five years.
"This is a signing ceremony. I don't want to just stop at this ceremony; I will follow the work in the field so our people will feel the benefits," Jokowi said.
The signing was initially scheduled to be held at the Office of the Coordinating Economic Minister on Wednesday, but it was postponed after an order from Jokowi.
The financial closure of the mega project indicates that the government’s plans to meet domestic power demand are on the right track, the President said. "It's a message that the government can solve problems. We urge investors to complete this project on time, as promised," he added.
Meanwhile, Coordinating Economic Minister Darmin Nasution said the project was the first public-private partnership (PPP) for a power plant to reach financial closure. "This project has significant value for Indonesia, because it will be the largest power project in Asia with a capacity of 2 x 1,000 MW," he said.
"With this financial closing, the physical construction of the project can begin immediately," he said.
With investment of approximately US$4.2 billion, the power plants will be built by Bhimasena Power Indonesia (BPI), a joint venture between Indonesian company Adaro Energy and two Japanese power companies, Japan's Itochu Corporation and the Electric Power Development Co. Ltd (J-Power).
To construct the project, BPI secured $3.4 billion in loans from an international commercial banking syndicate, of which $2 billion came from the Japan Bank for International Cooperation (JBIC).
BPI president director Mohammad Effendi estimated it would take 48 months to complete the construction, meaning the power plant would be finished by June 2020. However, he acknowledged the President’s instructions to speed up the construction and promised to complete it by the end of 2019.
The project, which initially commenced in 2012 and was commercialized in 2016, stalled because of land acquisition problems. Communities in areas surrounding the site refused to sell their properties, citing environmental issues.
However, the Supreme Court rejected their appeal on the land-acquisition dispute in March and upheld a Central Java gubernatorial decree allowing a 125,146 square meter site to be used for the power plant.
Aside from the financial closure, Jokowi also witnessed an agreement for five toll road projects on Thursday. The total of six project signing ceremonies he witnessed were among the country's priority projects.
The five toll roads are the Manado-Bitung project in North Sulawesi, Balikpapan-Samarinda in East Kalimantan, Terbanggi Besar-Pematang Panggang-Kayu Agung in Lampung and South Sumatra, Pandaan-Malang in East Java and Serpong-Balaraja in Banten. (bbn)
