Construction to start on US$143m Patuha Geothermal plant in Indonesia

Alexander Richter 31 Mar 2009

Reported locally, construction is about to start on the US$ 143m Patuha Geothermal Power Plant in the second quarter of this year.

“The second phase of Indonesia’s ambitious $17.25 billion fast-track power-generation program is expected to get under way in the second quarter with the construction of the $143 million Patuha geothermal plant in West Java Province, officials said on Wednesday.

The long-delayed project, expected to be completed in 2011, is being built by PT Geo Dipa Energy, a jointly owned subsidiary of state oil and gas producer PT Pertamina and state electrical utility PT Perusahaan Listrik Negara, or PLN.

“We’ll finance about $60 million from our own equity in the form of fresh funds and equipment,” said Prakimia Semiawan, Geo Dipa’s chief executive. “The rest is to be financed by a consortium led by PT Bank Negara Indonesia Tbk [BNI].”

The plant is expected to contribute about 500 million kilowatt hours per year to the national energy grid, she said. “This project is the first geothermal plant in the second phase of PLN’s fast-track plan.”

The geothermal project, located in Patuha, Bandung, West Java, will have a capacity of 55 megawatt (MW) from a potential of 400 MW.

The project is about five years behind schedule because of contract disputes with PT Bumi Gas Energi, Geo Dipa’s former partner.

“We had the project and the money to build it but it was held hostage by a party that lacked the money to build it,” said Sofyan Djalil, the state minister for state-owned enterprises, in a speech announcing a memorandum of understanding between Geo Dipa and PT Rekayasa Industri, the state-owned company that will be the main contractor for the project.

Prakimia said the dispute over the previous contract arose because there was no escape clause included and there was no time limit on the former partner’s lack of progress.

“Our position on the old contract was pretty weak,” she said.

Khishna Suparto, BNI’s managing director, said the bank would arrange financing for a consortium of banks that would include PT Bank Mandiri Tbk and PT Bank Rakyat Indonesia Tbk.

“The banks will finance about $80 million. There are two financing options currently under discussion,” he said, adding that either BNI would be the majority lender or all members of the consortium would split the funding equally.

Geo Dipa is trying to attract new investors for $600 million worth of projects by 2010 in Central Java Province and Patuha, West Java Province, Prakimia said.

If the project starts by 2010, it will be in operation by 2014 or 2015, she added. Geo Dipa recorded revenue of $12 million in 2008, with Rp 18 billion ($1.57 million) in net profit. The company expects revenue to increase by 5 percent to 10 percent in 2009, Prakimia said.

Source: Jakarta Globe Business, further details in The Jakarta Post