Adaro consortium gets $3.2B plant project

A consortium of Indonesian and Japanese firms has won a contract to build coal-fired power plants in Central Java.

Indonesian coal miner Adaro Energy, Japanese trading house Itochu Corp. and Japanese electricity company Electric Power Development Co., which is also known as J-Power, will build the $3.2 billion project, said Dahlan Iskan, the president director of state utility provider Perusahaan Listrik Negara.

The project is part of the first phase of the government’s “fast-track” program to add 10,000 megawatts of electricity to PLN’s power grid.

PLN had targeted an additional 10,000 MW by this year, but the program, which started in 2007, has only produced an additional 4,000 MW.

Adaro’s consortium was the only one of the four qualified bidders that passed its technical evaluation, Dahlan said. It also submitted the lowest bid among the other competitors.

The other three bidders were Japanese trading company Marubeni Corp.; China’s largest coal producer, China Shenhua Energy Company; and a consortium between China National Technical Import Corp. and Guangdong Yudean Group.

The project, which involves building two coal-fired power plants with capacity of 800 to 1,000 MW in Pemalang, Central Java, will receive the government’s guarantee through Penjaminan Infrastruktur Indonesia. The state-owned company will act like an insurance company, compensating investors for losses caused by policies that hurt their investments.

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