Indonesia's Adaro Energy says power plant on track

Indonesia's Adaro Energy says power plant on track

Adaro Energy's power generation project in the Indonesian province of
Central Java is on track after securing necessary financing and regulatory
approvals, the company's CEO said.

The 2,000MW coal-fired plant, the first by the coal producer, was delayed
for more than four years due to land acquisition issues. However, Adaro has
begun clearing land and laying the foundation for construction.

"The progress is in line with the promise to the Indonesian government [to
complete it] by 2020," Adaro CEO Garibaldi Thohir said in an interview on
Friday. The grid that connects to the power plant will be ready by 2019 "for
sure," he told the Nikkei Asian Review on the sidelines of the Nikkei
Asia300 Global Business Forum in Bangkok.

In June, Adaro and the consortium in charge, which includes Japan's Electric
Power Development and Itochu, signed a $3.4 billion loan to jump-start the
project.

The project is part of the ambitious plan by Indonesian President Joko
Widodo's government to construct 35,000MW of generating capacity by 2019.
Current capacity meets only 90% of demand throughout the Indonesian
archipelago.

In the past, such infrastructure projects were often carried out by state
enterprises. The current plan opens up opportunities for the private sector
to participate, a move that is welcomed by Adaro. "Indonesia needs Adaro,
and Adaro needs Indonesia," Thohir said.

Despite the current commodity rout, Thohir said prices of coal will recover
as demand is coming from neighboring countries. He said Adaro will "not only
survive but run" when prices rise again, due to its stringent cost control
measures.

As of last week, prices for Australian thermal coal, a benchmark for Asia,
had recovered to $80 a ton, the highest since January 2014.

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Ref:
http://asia.nikkei.com/Business/AC/Indonesia-s-Adaro-Energy-says-power-plant
-on-track

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com