PLN: Batang Power Plant to Start Commercial Operations Before 2020
Batang. The 2,000 megawatt coal-generated power plant in Batang, Central Java, the groundbreaking of which was officiated by President Joko Widodo this week, is targeted to start commercial operations by the end of 2019, the chief at state electricity company Perusahaan Listrik Negara said.
The controversial power plant, which costs about $4 billion, has been delayed for four years due to land acquisition problems.
The land for the Batang plant remains under dispute as residents of the area had yet to relinquish some 20 hectares of the plant's total concession to Bhimasena Power Indonesia (BPI) as the operating contractor and developer, a Greenpeace campaigner said on Friday.
However, both Joko and the chief of PLN, which will buy electricity from the plant, expressed optimism that land acquisition problems would not stand in the way of the plant's development.
“Be optimistic that all problems can be resolved ... For investors, please: no more doubts," said Joko.
The president acknowledged there was problem with land acquisition for the project, but he said Central Java Governor Ganjar Pranowo made a commitment to assist in solving all legal issues.
Joko also officiated an electrification program for 50 regions on Friday, which will cover outlying parts of the country.
PLN president director Sofyan Basir said the Batang plant will be developed under a build-operate-transfer (BOT) scheme with a concession period of 25 years. PLN will be the ultimate user of the plant after the BOT scheme ends.
"This project is targeted to start commercial operations by the end of 2019," Sofyan said. He also acknowledged the remaining land disputes, but said this only concerns 9 hectares. The dispute is now being settled at the courts, he stressed.
Sofyan said land owners will be compensated with an average value of Rp 100,000 ($7) per square meter of land.
Mohammad Effendi, president director of BPI, said the project is funded with equity from BPI and loans from the Japan Bank for International Cooperation. With a concession period of 25 years, PLN has agreed to buy electricity produced from the plant at $5.79 per kilowatt hour (kWh).
The plant is designed to use Ultra Super Critical technology, which is supposed to minimize its environmental impact. Activists however remain concerned.
BPI is a joint venture from the consortium that won the tender for the project in June 2011. Coal miner Adaro Energy controls a 34 percent stake in BPI, while Japan's Electric Power Development Company (J-Power) and Itochu control 34 percent and 32 percent respectively.
Investor Daily
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