J-Power, Adaro, Itochu win $3.2 bln Indonesia power plant

JAKARTA, June 2 Thu Jun 2, 2011 6:14am EDT

JAKARTA, June 2 (Reuters) - A consortium of Japan's Electric Power Development Co (J-Power) , Itochu Corp and Indonesian coal miner Adaro Energy have won a tender to develop a $3.2 billion coal-fired power plant in Java, Indonesia's state power firm Perusahaan Listrik Negara (PLN) said on Thursday.

The 2,000-megawatt power plant marks the first public-private partnership (PPP) project among many that Indonesia's government is hoping for to overhaul its infrastructure, said Dahlan Iskan, PLN's CEO.

He said risks in the project's development would be covered by the Indonesia Infrastructure Guarantee Fund, set up for government initiated infrastructure projects.

"The tender is a milestone for PLN and the Indonesian government, because this is the first public-private partnership project that was auctioned successfully," Iskan said in a press statement.

Power shortages are common in Indonesia, where poor infrastructure is one of the factors restricting growth in Southeast Asia's largest economy. The government says it needs $150 billion in infrastructure and is looking for two-thirds from private investors.

President Susilo Bambang Yudhoyono launched a "masterplan" last month to drive the country to become a world top ten economy by 2025, including many planned PPP projects.

The consortium's Pemalang power plant is expected to begin operations in 2017. (Reporting by Alfian; Editing by Neil Chatterjee)

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