Jakarta Globe, Tito
Summa Siahaan, May 29, 2013
China Power will harness the power of North Kalimantan’s Tayan River for Indonesia’s largest power project. (JG Photo/Yudhi Sukma Wijaya) |
Chinese
companies China Power Investment Corporation and Anhui Conch Cement announced
more than $17 billion of investments in Indonesia, underscoring the
attractiveness and allure of the Southeast Asian nation to foreign investors.
China
Power, a Chinese state-owned enterprise, has been granted permission by the
Indonesian government to build what could be the archipelago’s largest-ever
power plant project.
Xia Zhong,
a vice president of China Power, met with Indonesia’s Energy and Mineral
Resources Minister Jero Wacik late on Monday to discuss the company’s plan to
develop 7,000 megawatts from hydropower plants on Kalimantan island.
The project
will harness the power of the Tayan River in the newly created North Kalimantan
province.
Jero told
reporters in Jakarta on Monday that the Chinese firm will invest a total of $17
billion for hydroelectric plants in North Kalimantan.
“Construction
will take seven years to be completed and will be divided into five phases,” he
added.
China Power
has concluded the preliminary study of the project and will proceed with its
feasibility and environmental assessment impact study, Jero said.
“We expect
to see the groundbreaking next year,” the minister added. “Construction for the
first phase will be completed in one-and-a-half years. By 2015, the power plant
will generate 700 megawatts of electricity,” said Jero.
The
minister said that the government will not provide additional incentives.
The
government has set the price level for renewable energy like hydropower
considerably high to entice more investors. In comparison, the price for
coal-fired power plants is around 4 to 9 cents per kilowatt-hour.
“They did
not request for incentives. They think that the 24 cents per kilowatt-hour
power purchase price for hydropower plant is good.”
In
Indonesia, independent power producers must sell their electricity to state
utility firm Perusahaan Listrik Negara, based on the government’s approved
pricing.
China Power
is also looking into the possibility of building a smelter for bauxite,
according to Jero. “But they have yet to make any estimations,” he added.
Electricity
generation is China Power’s core business and in total has power plants with a
capacity to generate 80,074 MW of electricity.
Currently,
the firm is building a 6,000 MW hydropower plant in Myanmar, from which the
electricity will be channeled to mainland China.
China Power
also has coal and aluminum assets.
Anhui
announced its plan to build a cement plant in South Sulawesi at total
investment of 2 billion yuan ($327 million), Bloomberg News reported on
Tuesday.
Anhui’s
main business in the manufacturing and selling clinkers and cement products. It
distributes cement and clinkers under the brand named Conch.
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