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Jakarta Post

South Korean investor to build ‘largest power plant’ in North Sumatra

  • Apriadi Gunawan

    The Jakarta Post

Medan, North Sumatra   /   Fri, August 28, 2020   /   06:26 pm
South Korean investor to build ‘largest power plant’ in North Sumatra The new 10 Megawatt gas-fired power plant (PLTMG) is pictured in Timika town, Mimika, Papua, on June 25. (PLN/PLN)

PT Hanlim Power Corporation, the local arm of a South Korean company, plans to build a 4,800 megawatt (MW) gas-fired power plant (PLTGU) in Batubara regency, North Sumatra, which is touted to be the largest in the province.

The company signed a deal with North Sumatra Governor Edy Rahmayadi on Wednesday to expedite the issuance of land and administrative permits for the plant, which will power is the Sei Mangkei Special Economic Zone (SEZ) and Kuala Tanjung Industrial Zone.

“I understand we will face many challenges but seeing the governor’s enthusiasm, I decided to invest in North Sumatra,” said Hanlim chairman Paul Han R Lee. “This deal marks the first step to beginning construction.”

Construction will begin in January 2021 at the latest, Edy said.

The plant will be built in three equal stages of 1,600 MW each and is slated for full-capacity operations before Edy’s term ends on Sept. 5, 2023.

He noted that the plant’s power would be directly distributed to the two zones, a decision that circumvents the legally sanctioned distribution monopoly of electricity giant PLN. 

The state-owned firm has been unable to guarantee the distribution of the plant’s power as it had not finished its latest electricity procurement plan (RUPTL), Edy explained, adding that Hanlim would have moved the project to Vietnam unless development began soon.

The North Sumatra governor expects the plant’s operations to attract 250 investors, which would, in turn, create more job opportunities for the locals.

The province has 345,000 unemployed residents, according to latest available Statistics Indonesia (BPS) data in February.

Indonesia is banking on several SEZs and industrial zones to stoke the growth of domestic industries, which has seen its share of gross domestic product (GDP) steadily decline over the past few decades. 

President Joko “Jokowi” Widodo in his annual speech on Aug. 14 reiterated his commitment to eliminating overlapping regulations and to building more industrial zones across Indonesia.

The government is currently developing several industrial parks, such as the Batang industrial park in Central Java and one in Majalengka regency, West Java, to solve land acquisition issues usually faced by investors.

It is planning to develop at least 27 industrial parks, according to the 2020-2024 National Medium-Term Development Plan (RPJMN). Most of them will be developed outside Java Island. (nor)