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Economy in brief: German bank grants PLN 85m euro loan
State-owned electricity company PLN has secured an €85 million (US$ 99
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span>State-owned electricity company PLN has secured an €85 million (US$ 99.9 million) loan from German development bank Kreditanstalt für Wiederaufbau (KfW) to finance the development of its Kumbih III hydro power plant (PLTA).
The power plant, set to benefit from the Kumbih River, which flows through the cities Sidakalang in Dairy regency, North Sumatra and Subulussalam in Aceh, will have a capacity of 3x15 megawatt (MW) and require €100 million in investment.
PLN corporate planning director Syovfi Felienty Roekman and KfW senior project manager Jens Wirth signed the loan agreement on Friday.
Syofvi said the direct loan would not have a government guarantee and would have a 15-year tenor.
“We’ll prepare the rest of the funding on our own,” she said in a statement on Saturday.
Syovfi further said the power plant was expected to meet the surging demand for electricity in northern Sumatra and reduce production costs, owing to the use of fossil fuels, in addition to contributing to the domestic renewable energy mix.
Meanwhile, Wirth said the cooperation would be crucial to support PLN in accelerating electricity replenishment from renewable energy in Indonesia.
“We expect the project to begin immediately and consequently, the public will soon benefit from it [the power plant],” said Wirth.
The construction of PLTA Kumbih III is scheduled to kick off in 2019, while it is expected to operate commercially in 2023. — fny
