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State-run utility firm to build power plant in Indonesia

A consortium led by Korea East-West Power Co. plans to set up a coal-fired power station in Indonesia, the state-run company said Thursday.

The consortium, including Perusahaan Listrik Negara and Adaro Energy, beat two other groups to be picked as the preferred bidder for the $400 million project, the EWP said. PLN is Indonesia’s largest power supplier and Adaro is the country’s No. 2 coal producer.

Once signed, the deal will see the consortium build a 200-megawatt thermal plant in South Kalimantan by the end of 2015 and operate it for the next 25 years. If negotiations are successful next month, construction will begin in March 2013.

The Seoul-based EWP predicted the deal would generate 3 trillion won ($2.64 billion) in revenue and 370 million won in net income over the 25-year period. It also expects to create 1,500 jobs and opportunities for more than 40 small Korean firms to export equipment and expand overseas.

The envisaged plant is the latest in a series of infrastructure programs in Southeast Asia’s largest economy to support its rising population and brisk growth. The government wants to scale up its electricity reserves by adding a total of 20,000 megawatts in production capacity by 2025.

“Power shortages will remain common in Indonesia in the coming years as demand grows faster than supply, which means there’s huge growth potential in the market,” an EWP official said.

By Shin Hyon-hee (heeshin@heraldcorp.com)
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