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PLN Indonesia Power offers hydropower projects to Japanese investors
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PT PLN Indonesia Power finance director Endang Astharanti (left) speaks at the Japan RE Invest Indonesia 2024 event, on Nov. 27 at the Indonesian Embassy in Tokyo. Other speakers at the forum included (seated, from left to right), PT PLN Nusantara Power acting director of business development and commerce Dwi Hartono, PT PLN hydro energy vice president Hendro Prasetyawan and PT Awina Sinergi International CEO Ananda Setiyo Ivannanto. (Courtesy of the Indonesian Embassy in Tokyo)
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T PLN Indonesia Power (PLN IP), a subholding of state electricity company PT PLN, invited Japanese investors during the Japan RE Invest Indonesia 2024 event to join its decarbonization efforts by investing in hydropower projects, known as the Hydronesia Project, throughout Indonesia, specifically in Kalimantan, Java, Bali and Sumatra.
Speaking at the renewable energy investment forum, PLN IP finance director Endang Astharanti introduced the Hydronesia project, which comprises several hydropower plants under PLN IP across Indonesia to promote energy security as well as the energy transition from fossil fuels to renewable energy.
In addition to generating electricity for PLN, PLN IP is also developing Beyond KWh, a business which includes services such as operation and maintenance (O&M) for electricity generating companies. In 2023, PLN PR recorded a US$546 million net income with total assets amounting to $25.75 billion.
Endang said PLN IP currently manages 21.4 gigawatt (GW) power plants across Indonesia, of which 16.98 GW power plants are connected to the Java-Bali network. Of those plants’ total capacity, 90 percent is generated primarily from coal. Only 10 percent of its power portfolio is from renewable energy, which has become a challenge for PLN IP.
“This is a challenge for us to accelerate the development of renewable energy, which is why we have a long list of renewable energy projects,” Endang told the RE Invest Indonesia 2024 audience at the Indonesian embassy in Tokyo on Nov. 27.
To support the government in achieving its net zero emission (NZE) target by 2060, PLN IP is committed to accelerating the development of renewable energy, focusing on hydropower, geothermal, wind, and solar energy. By 2030, PLN IP plans to add 9 GW of power capacity, with approximately 6 GW coming from renewable energy. Of this, 1 GW comprises 13 ongoing projects, the majority of which are solar power plants, and one is a wind farm project.
With the Hydronesia project, PLN IP seeks partnerships with co-developers to jointly conduct hydropower studies and accelerate the development of ready-to-execute hydropower projects.
PLN IP is inviting partners for the Hydronesia project under a proposed ownership scheme of 51 percent allocated to PLN IP and 49 percent to the partner. The proposed ownership scheme, however, remains open for negotiation. The funding scheme for Hydronesia will be supported by 70 percent project financing.
PLN IP offers three projects under the Hydronesia project. They are the Tanjung Sakti hydropower plant in South Sumatra, Jatiluhur pumped storage plant in West Java and Tabang hydropower plant in East Kalimantan, with a combined capacity of 1,045 megawatts (MW).
“We are open to any kind of partnership with Japanese investors and financiers, either as developers, support, technical assistance or financing,” Endang said.
Details of the three hydropower projects on offer are as follows:
Tanjung Sakti hydropower plant
The Tanjung Sakti hydropower plant is a reservoir type power plant located between South Sumatra and Bengkulu provinces and is planned to be connected to Sumatra’s grid with a total capacity of 94 MW. The total investment for the plant is estimated at $329 million, of which $230 million will be funded through project financing. This project is expected to be commissioned in 2032.
Jatiluhur pumped storage hydropower plant
The Jatiluhur pumped storage hydropower plant is also a reservoir type, but with added pumped storage technology. The plant has a capacity of 760 MW and is connected to the Java-Bali grid to maintain reliability and stability of the Java Bali system. Total investment for the project will be $868 million, of which $607 million will come from project financing. This project is expected to be commissioned in 2032.
Tabang Hydro Power Plant
The Tabang hydropower plant has completed its feasibility study. The Tabang hydropower plant is a Hydropower Plant of Run of River Type and has a total installed capacity of 110 MW. The plant will be connected with the Kalimantan grid in order to serve the island’s growing demand for electricity, especially from the development of the Nusantara Capital City. Project value is $252 million, of which $176 million will be raised from project financing. The Tabang hydropower plant has targeted a commissioning date of 2031.
