TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Pupuk Indonesia to penetrate deeper into power business
State fertilizer producer PT Pupuk Indonesia is looking to penetrate deeper into the electricity business as it has allocated billions of US dollars to acquire and develop a number of power plants in the near future
Change Size
S
tate fertilizer producer PT Pupuk Indonesia is looking to penetrate deeper into the electricity business as it has allocated billions of US dollars to acquire and develop a number of power plants in the near future.
The company’s energy unit PT Pupuk Indonesia Energi (PI Energi) signed on Friday a memorandum of understanding with state engineering firm PT Rekayasa Industri (Rekind) to take over a majority stake of 51 percent in the latter’s subsidiary PT Rekind Daya Mamuju (RDM).
RDM currently operates a coal-fired power plant with a capacity of 2x25 megawatts (MW) in West Sulawesi with a total investment value of Rp 1 trillion (US$74.8 million).
“PI Energi has been mandated [by its parent company Pupuk Indonesia] to take over all electricity-related businesses. That’s why we decided to acquire RDM,” PI Energi president director Tentaminarto Tri Februartono said on Friday.
At present, Rekind holds a 90 percent stake in RDM, while the remaining 10 percent of shares are owned by PT Rekadaya Elektrika, which is indirectly controlled by state electricity firm PLN.
Under the agreement, PI Energi and Rekind will establish an independent valuation team to calculate the value of RDM’s shares so that they can seal the acquisition deal in early 2018 at the latest.
Moreover, before the RDM deal is done, PI Energi expects that it can fully complete the development of its Gresik Gas Cogeneration Plant (GGCP), which will generate 22 MW of electricity and have a production capacity of 160 tons of steam per hour, in East Java by November.
PI Energi has awarded the engineering, procurement and construction (EPC) contract worth $47 million for the Gresik facility to state construction firm PT Pembangunan Perumahan.
“So we aim to complete the development of the Gresik facility this year, and in 2018, we expect to seal the acquisition deal with RDM and start thinking about constructing another new power plant in Aceh,” Tentaminarto said.
The Aceh facility is projected to have a capacity of around 20 to 30 MW of electricity to support the operations of PI Energi’s sister company, fertilizer producer PT Pupuk Iskandar Muda, in the region.
Nonetheless, PI Energi has yet to decide whether it will develop in Aceh a coal-fired plant, which will require an investment value of between $1 million and $1.5 million per MW, or a gas-fueled one that could cost twice as much.
These new facilities will add to PI Energi’s existing gas-fueled plant in Bontang, East Kalimantan, which is able to generate 34 MW of electricity and has a production capacity of 146 tons of steam per hour.
The Bontang plant, operated by PI Energi’s subsidiary PT Kaltim Daya Mandiri, currently supplies electricity to sister company PT Pupuk Kalimantan Timur and other industry players in the region. It also sells some of the excess capacity to PLN.
PI Energi has also requested Kaltim Daya Mandiri to penetrate into the renewable sector. The subsidiary plans to develop two mini hydro power plants, one in Garut, West Java, with a capacity of 4.5 MW, and another one in Banyumas, Central Java, with a capacity of 3.2 MW.
“In 2018, we might develop the one in Garut first. For the Banyumas plant, we still have to wait for PLN’s decision about the amount of electricity that can be sold to it before starting to construct the facility,” Kaltim Daya Mandiri president director Tedy Nawardin said.
PI Energi’s move to develop renewable facilities is in line with the government’s goal of boosting the portion of renewable energy sources in the national energy mix to 23 percent by 2025 from only 7.7 percent last year.
To meet the target, PLN aims to develop renewable power plants with a total capacity of 21,549 MW between 2017 and 2026, 57.3 percent of which will come from hydro power facilities and 29.2 percent from geothermal facilities, as stated in its latest electricity procurement business plan.
