PLN to Build Immediately the Sumatra-Malaysia Electrical Interconnection

PLN to Build Immediately the Sumatra-Malaysia Electrical Interconnection

Jakarta, PT PLN (Persero) is targeting a review on interconnection of Sumatera-Malaysia to be finished this June. The company is targeting this interconnection to be completed in 2018. 

Planning Director and Affiliation of PLN, Murtaqi Syamsuddin, said that his party is currently still in the stage of finishing interconnection of Sumatera-Malaysia project review. The review covers coal mining and construction work on the plant and transmission cable. 

He is targeting that the review could be completed in June. “After that, we will take a decision on taking the business model and funding this project,” he said in Jakarta, Sunday (26/1).

Interconnection Project of Sumatera-Malaysia with PLTU 2.000 megawatt (MW) and Peranap coal mine will be done in PLN with PT Bukit Asam and Tenaga National Berhad. The value of this project is estimated to be Rp 15 Trillion. 

In the plan, PLN, TNB, and PT Bukit Asam will form a joint venture company (special purpose company/SPC) for each projects. Murtaqi admitted that until this moment there has been no agreement between the three about the joint business model.  All three also have yet to determine about the stock amount of each party in the joint venture later. 

“We already have the number (shares), but have not been agreed upon. We will take a decision after the review is completed next June,” he explained. He acknowledged that the decision to determine the stock amount is late from the targeted schedule. It was actually targeted to be completed in late 2013. 

Whereas, the trio had agreed to appoint a consultant transaction (transaction advisor) before in order to speed up the completion of the Sumatera-Malaysia transmission. The consultant shall give consideration related to the cooperation of the three from the aspects of commercial, legal, and technical. In addition to consultant transaction, there was a plan to appoint a technical consultant to see the feasibility of each projects.

The appointment of consultants is needed so that PLN, TNB, and PT Bukit Asam are able to make a mutual agreement in 2013 so the construction and auctions could be started this year. Moreover, the development of these three projects is having enough backward than the initial schedule. 

Related to the funding of this project, Murtaqi previously mentioned that the Asian Development Bank (ADB) had told about its interest to disburse the funds for the project. However, there has been no agreement regarding the funding. “But normally, there will be a funding. However, there has been no agreement regarding whether there will be a loan for the project financing and equity participation,“ he said. It is estimated that the value of the project reach Rp 15 trillion.

Malaysia-Sumatera interconnection will be using undersea cables 250 kilovolt (kV) type of High Voltage Direct Current (HVDC). The network interconnection is built to connect Garuda Sakti, Sumatra, and Gong Bay, Malaka- Malaysia. For the stun source, three parties build PLTU Mulut Tambang Peranap which have a capacity of 800-1.200 MW and can be added according to the needs of the two countries. 

The supply of these plants will be focused to strengthen the Sumatera electrical system and the rest will be exported to Malaysia. The company targeted that this interconnection network will be able to start exporting  stun to Malaysia in 2018. PLN forecasted that later in 2018, the need of electricity in the Sumatera electrical system, which is 7000 MW, will have been covered after the completion of the Sumatera interconnection in 2014.

By: Retno Ayuningtyas
Source: Investor Daily, 27 January 2014