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Govt to tender out financing of five coal-fired power plants
The Finance Ministry will invite local and foreign banks in late March to a tender for the financing of five power plant projects estimated to cost US$2
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The Finance Ministry will invite local and foreign banks in late March to a tender for the financing of five power plant projects estimated to cost US$2.18 billion, says an official.
The head of the government's power sector development team, Yogo Pratama, told reporters Tuesday the tender aimed to secure loans of up to $1.85 billion, or about 85 percent of the total needed to build the projects.
Yugo's team directly reports to President Susilo Bambang Yudhoyono.
The five coal-fired power plant projects will be built under the government's "crash 10,000 MW" power program.
Plants include the 600-megawatt (MW) Pacitan plant in East Java, the 900 MW Teluk Naga plant in Banten, the 900 MW Pelabuhan Ratu plant in West Java, the 200 MW Lampung plant and the 400 MW North Sumatra plant.
"We expect the signing on the loan agreements to be completed within the next two to three months," Yogo said.
Previously the government had secured loans worth $2.37 billion from local and foreign banks to finance the construction of five other power plants in Labuan, Banten; Indramayu, West Java; Rembang, Central Java; Suralaya, Banten; and Paiton, East Java.
The government still needs another $4.2 billion in loans for the construction of 30 more power plants both in and outside Java to complete the 10,000 MW program.
Under the program, which was initiated in 2006, the government aims to provide an additional 10,000 MW of power to the country by 2010, with 10 new coal-fired power plants to be built in Java and 25 others outside Java.
The Finance Ministry recently took over the authority of state electricity firm PT PLN in finding loan sources for the projects due to the company's slow progress.
Under the previous arrangement, loans would have fallen under the responsibility of projects' contractors, but PLN has faced difficulty in securing loans as banks usually ask for guarantees from the government.
The Finance Minister took over PLN's role and held tenders on its own to obtain the loans.
In an issue related to the retendering of the engineering, procurement and construction of the 600 MW Cilacap power plant in Central Java, Yogo said that so far 18 companies had passed the first qualification round.
The power plant had to be retendered as its location has to be moved to Cilacap from its original site in Jepara, Central Java, due to technical problems.
