Indonesia's PLN in talks with investors over early retirement of coal plants

JAKARTA, Oct 18 (Reuters) - Indonesia's state utility Perusahaan Listrik Negara (PLN) is in negotiations with U.S. and European investors to help finance an acceleration scheme for its coal power plant retirement, its chief executive said on Tuesday.

PLN is targeting reaching net zero carbon emission by 2060 and planning the early retirement of coal plants with a collective capacity of 10 gigawatts.

"We are in the process of negotiating with global communities, American counterparts, European counterparts, global investment (firms), about an energy transition mechanism (ETM)," Darmawan Prasodjo told a G20 side event in Indonesia's Bali, which was streamed online.

He said 6.7 gigawatt of coal power capacity is earmarked for retirement earlier under the programme.

As of 2020, PLN had 63.3 GW of installed power capacity with 50% coming from coal-fired plants.

Darmawan said some of PLN's coal capacity would come to natural retirement in 2044, but the company could expedite the phasing out by a decade with affordable financing at a 2.5% to 3% rate.

Although PLN vowed it would not commission new coal power plants, Darmawan said that a number of coal projects currently under construction would still enter the system until 2026, amounting to 13 GW of output.

On the sideline of the same event, state coal miner PT Bukit Asam (PTBA.JK) signed a principal framework agreement with PLN to take over a coal-fired power plant in West Java, according to the ceremony's broadcast.

PTBA president director Arsal Ismail told reporters that the takeover could reduce the lifetime of the power plant by 9 years, without disclosing the terms and value of the agreement.

Reporting by Fransiska Nangoy, Bernadette Christina Munthe; Editing by Martin Petty and Ed Davies

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