PLN TO COMPLETE THREE THERMAL POWER PLANTS IN SEPTEMBER

Jakarta, July 25 (ANTARA) - State-owned electricity firm PLN will next September complete construction of three thermal power plants (PLTU) in the first phase of the 10,000 MW power project, its president director said.

"Three PLTUs, namely the Labuhan, Rembang and Indramayu PLTUs, will be completed next September 2009," PLN Director Fachmi Mochtar said here on Friday.

He said that with the completion of the three projects it meant that about 16 percent of the first phase of the 10,000 MW power project had been completed.

The PLN director explained that based on Presidential Decree No.71/2006 on the construction of 10,000 MW, the projects would be developed in 35 locations. Of the 35 locations, 33 locations have been approved.

"Two other locations, namely Timika and Ambon, will also be put to tender soon," he said.

Fachmi said that there was no significant problem with funds in the development of the 10,000 MW project. "But there were several locations which received funds a little bit slower," he said.

On the occasion, Fachmi also said that the regional governments of Riau and East Kalimantan provinces also had made a request for the construction of a 2x100 MW power plant.

The two regional governments have prepared a funding scheme respectively amounting to Rp2 trillion.

"The funds would be made available by the local Regional Development Bank (BPD)," Fachmi said.

But there is a problem with that scheme because the BPD would not disburse a fund of Rp2 trillion as it would breach minimum limit of credit provision (BMPK) condition.

Fachmi said that if the project was guaranteed by the government, however, the BPD could disburse a fund of up to Rp2 trillion without breaching the BMPK condition.

"The condition is that the project concern must be guaranteed by the government that it is a project based the presidential decree no.71/2006 project scheme," he added.

So in this case, according to the PLN president director, a legal umbrella is needed.