Indonesia's PLN signs US$889 mln power contracts with China

Indonesia's state-owned power company PLN has inked two engineering procurement contracts worth US$888.4 million with Chinese companies for the constructions of coal-fired power plants, local reporters said on Saturday.

PLN signed a US$642 million worth of contract on Apr. 25 with China National Machinery Equipment Corp. (Sinomac), China National Electric Equipment (CNEEC) and a local firm PT Penta Adi Samudra, for the 700-Megawatt Tanjugn Awar-Awar plant in East Java, according to sources. It also inked another contract worth US$247.4 million for the 200-MW Nagan Raya plant in Aceh with China's Sinohydro Corp.

PLN has a monopoly over power supply in Indonesia and has 24,000 MW of generating capacity, however, its daily output is far below capacity as most of its plants are old and inefficient.

Indonesia, the only OPEC member in Asia-Pacific region, is looking for other sources of energy such as coal and natural gas to meet rising power demand and to cut down on consumption of expensive crude oil as its own reserves dwindle.