Indonesian firms to help build power plant for Malaysia

Two Indonesian companies and a Malaysian company will develop a coal-fired power plant that would deliver electricity to Malaysia.

Indonesia's Perusahaan Listrik Negara and coal miner Tambang Batubara Bukit Asam and Malaysian electricity utility firm Tenaga Nasional inked an MoU for the project in the Indragiri Hulu district, Riau.

The MoU includes the construction of an undersea cable connecting Indonesia and Malaysia.

The power plant will generate up to 1,200 megawatts of electricity using thermal coal from PTBA’s nearby mine, which produces mostly low-grade coal with an estimated reserves at around 792 million metric tons.

The project will be valued at no less than $1.6 billion, said PLN president director Nur Pamudji.

Executives from the three companies will still have to meet to determine the exact project value and the power purchase tariff.

He added that the generation capacity could be expanded to 3,000 megawatts as the mine had a substantial amount of reserves and there was also a possibility of the Singaporean government joining the cooperation.

“The construction will be completed within five years, probably in 2017, while the electricity will be divided equally between both countries,” Nur said.

He added that by 2014, Indonesia would start to import electricity from Malaysia’s power plant in Sarawak, which is situated on the larger Kalimantan island.

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