R-Power to invest US $5 B in Indonesian coal mines

Reliance Power will infuse US$5 billion in two projects-one each in South Sumatra and Jambi provinces. The investment covers coal mining, setting up of railway lines, ports and power projects.

According to a senior company official, who did not wish to be identified, the project in South Sumatra involves development of a 2- billion mt coal mine, a 200-km railway line, a port and a 2,000-Mw power project at a cost of US$3.5 billion. The project in Jambi involves another coal mining unit, along with a port, railway line and a small power plant. It will cost US$1.5 billion without the power project.

Reliance Coal Resources, a subsidiary of Reliance Power, will sign two MoUs with representatives of the governments of both the provinces in New Delhi on Tuesday. Reliance ADA Group chairman Anil Ambani and Indonesian President Susilo Bambang Yudhoyono are exected to be present during the occasion.

Fiscal concessions, including land, are being offered to Reliance Power to make it attractive for them to invest in Indonesia, the official said. The investment for the development of the coal mine, rail & port infrastructure and the power project in Sumatra would be made in the next five years.


Coal from these mines will be exported for Reliance Power’s Krishnapatnam Ultra Mega Power Project in Andhra Pradesh. which is based on imported coal and also used for its 2000 Mw project in Indonesia.

These mines would ensure steady supply to the Krishnapatnam Project and also be more economical than other imported coal. Officials said talks are already on with banks to finance the first project in south Sumatra.