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PLN Unit and Adaro Team Up on Mine-Mouth Power Plant

JAKARTA ( – PT Indonesia Power, a subsidiary of state-owned electricity company PT Perusahaan Listrik Negara (PLN), has agreed to team up with diversified energy company PT Adaro Energy Tbk (IDX:ADRO) to develop a mine-mouth power plant in East Kalimantan, called PLTU Kaltim 5.

The power plant will have installed capacity of 2×100 MW. The project will be developed by a joint venture company in which Indonesia Power holds 51% stakes and Adaro Energy 49%.

President Director of Indonesia Power, a subsidiary of Adaro Energy, Sripeni Inten Cahyani was quoted by Bisnis Indonesia as saying that the project will cost around US$180 million.

“We (Indonesia Power) are proposing the joint venture to the parent firm, namely PLN. We will cooperate with Adaro,” Cahyani said.

Indonesia Power enters mine-mouth power plant following the call by the Energy and Mineral Resources Minister Ignasius Jonan recently that Indonesia will in the future encourage power plants to be built on mining sites or mine-mouth, therefore the costs for coal transportation can be eliminated.

The basic production costs (BPP) is a maximum of 75% of the local BPP tariff, as the coal price at the power plant is lower compared to coal price at other conventional coal-fired power plants.

Sripeni said the mine-mouth power plant will be located in one of Adaro Energy’s coal mining site, which has low-calorie coal, which is not commercially viable if the coal is exported. (*)

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