China Project Bids as Indonesia Plans $41 Billion Power Investment

---

Researched by Industrial Info Resources (Sugar Land, Texas). Chinese power companies continue to look with keen interest at the potential of the Indonesian power generation sector. Toward the end of December 2006, it was reported that the sector needs an investment of $41 billion in the network to cope with growing power demand. Bisnis Indonesia reported that $23.36 billion was required for the construction of new power plants, $7 billion for power transmission, and $8 billion for distribution.

The state-run electricity company PLN will focus on transmission and distribution investment, while the private sector will play a major role in power plant construction.

Concurrent with the investment report, the Vice Chairman of China’s NDRC (National Development and Reform Commission) said at a meeting with Indonesia’s Minister of Energy and Mineral Resources Purnomo Yusgiantoro, that the Chinese government intends to increase its investment in the energy sector in Indonesia with an emphasis on power generation, oil and gas, and mineral and coal mining development programs.

At the second China-Indonesia Energy Forum in Shanghai in November, bilateral agreements were signed for the construction of a $666 million coal-fired plant in Pangkep (South Sulawesi) and a $3 million iron ore processing plant in Sukabumi (West Java). Indonesia also signed a sale for an LNG purchase agreement with China’s Fujian province.

The Director General of Electricity and Energy Utilization said that the country had offered China an opportunity to take part in a program to build power plants with a combined capacity of 10,000 megawatts with a total value of $8 billion. It has been proposed that investors provide 85% of the funds with PLN providing the balance. For related news item see May 5, 2006 – Indonesia Books Tight Delivery of 17 Power Stations $7 Billion Deal with Chinese.

Chinese companies Sinomach (China National Machinery Corp) and Chengda Engineering are the front-runners to win the tender for three thermal power stations that are part of the 10,000-megawatt plan. They were the only companies submitting price offers on the three 300/400 MW thermal power projects in the tender opened by PLN in the first week of January.

Sinomach partnered with CNEEC and PT Penta Adi Samdura for the Tuban, East Java and Indramayu, West Java plants and Chengda filed an offer on the Labyuan, Banten plant.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 24 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.