Alstom has eyes on Indonesia’s second 10 000 MW power programme

(Source : The Jakarta Post)

Alstom has eyes on Indonesia’s second 10 000 MW power programme

2 March 2009 - Power plant equipment giant Alstom is eyeing an opportunity to take a part in the second phase of the 10 000 MW power programme, as the government has said it will issue a sovereign guarantee for the project’s financing, reported the Jakarta Post.

"We are looking forward to the second phase of the 10 000 MW [project]. The government’s early commitment to issue a sovereign guarantee will attract investment from various sources," said Johan T. Budisusetija, president director of PT Alstom Power Energy Systems Indonesia (Alstom Power ESI), here last Friday.

Alstom Power ESI is a subsidary of Alstom Indonesia, providing equipment and services for power generation.

Johan said Alstom Power ESI missed out on the opportunity to participate in the first phase of the 10 000 MW project because at the beginning of the project the Finance Ministry had not made any provisions for a guarantee, making the project’s financing unclear to investors.

Later, the government issued a sovereign guarantee for the first phase of the 10 000 MW project, but the investors chosen made it difficult for Alstom to join the project.

"The investors brought their own supplier. Meanwhile, overseas demand for power plants was booming, so we focussed more on exports," Johan said.

The first phase of 10 000 MW project also received significant financing commitment from Chinese banks, but this is currently facing problems since the banks have begun to ask if they can increase the interest rates on the loans.

The government guarantee for the second phase would make the project more attractive to other financial resources, Johan said.

Alstom did not provide details of the types of power plants the company was looking into under the second phase project.

"We tend to go after the large scale projects," Alstom Indonesia’s country manager, Edward Thiessen, hinted.

Alstom Power ESI has a factory in Surabaya producing power plants, boilers and heat recovery steam generators (HRSG). The factory is big enough to manage between four and six projects annually.