2017 target for Sumatra power plant serving Indonesia, Malaysia

Indonesia’s PT Bukit Asam Tbk is eyeing permits from the Indonesian and Malaysian governments for a power plant project with 800 to 1,200 megawatt (MW) capacity, intended to serve consumers in both countries.

The coal power plant, planned for Riau in Sumatra, located across the Straits of Malacca from Malaysia, is a three-way cooperation between Bukit Asam, Indonesia’s state-owned electricity firm PT PLN and Malaysia’s Tenaga Nasional Bhd (TNB).

Bukit Asam’s CEO Milawarma said the project was now undergoing a feasibility study, and would be subject to both governments’ agreement before progressing. He predicted the project would need an investment of US$1.8bil to US$2.2bil (RM7.8bil-RM9.6bil).

“After the feasibility study, both governments must approve transmission connections. Estimating a six-month approval process, and a year of raising funds, we should see the project begin in 2017,” he said during a public announcement at the ‘Investor Summit and Capital Market Expo 2015′ on Monday.

The power plant – initiated in 2012 – if all goes to plan, will be connected to the Asean power grid which serves Malaysia, Thailand, Myanmar, Vietnam and Laos.

Milawarma declined to comment on the plant’s electricity selling prices, saying they were yet be negotiated with TNB.

The cooperation will consider the balance of peak demand in the two countries.

Peak demand in Indonesia is usually at night, explained Milawarma, while in Malaysia it usually happened during the day – allowing the grid to support both countries’ demands.

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