Govt to resume Tanjung Jati B with leasing system
Tuesday, October 9 2001 - 03:44 AM WIB
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that the government had agreed with the investors to set the electricity price from Tanjung Jati B at 4.20 U.S. cents per kilowatt-hour.
With the new scheme, the government's plan to buyout the project at the value of $1.15 billion was automatically canceled.
"Actually, there are a number of schemes presented. However, the Kepress 133/2000 team and the vice president (Hamzah Haz) decided to continue Tanjung Jati B through leasing," Purnomo said.
Purnomo contended that the government chose leasing scheme because it would not burden the government's finance in short term.
"If we chose the buyout scheme, we have to provide additional fresh fund of $500 million. In addition, we have to borrow ($1.1 billion). It's difficult because our debt has been so high, and this will need the approval of the House of Representatives," Purnomo contended.
Tanjung Jati B is controlled by Sumitomo Corp of Japan and PT Hopewell Impa Power Tubanan.
The investors have secured new financing from Japan Bank for International Cooperation (JBIC), with a guarantee of liquidity facility from the government that ensures the continuity of the project.
Currently, Purnomo said, the re-negotiation of Tanjung Jati B almost reached its final process. The remaining issue to be discussed was the liquidity facility from the government.
The government has agreed to buy electricity from Tanjung Jati B at a range of 4.2 U.S. cents to 4.3 cents per kWh, depending of retail electricity prices in Indonesia. (*)