Sarawak Cable getting better power deal in Sumatra

The Star – Monday, 16 February 2015

By: JACK WONG

 

KUCHING: Sarawak Cable Bhd (SCB) is getting a better deal with the revised electricity tariff for its first hydro power plant in north Sumatra due for completion in September 2015.

SCB’s 78%-owned Indonesia unit, PT Inpola Mitra Elektrindo (IME), is developing the RM80mil plant project with generation capacity of 10MW.

According to SCB managing director and chief executive officer Aaron Toh Chee Ching, Perusahaan Listrik Negara Persero (PLN), the Indonesian utility body, had revised upwards the tariff to an average of 998 rupiah (28.5 sen) per kWh from the original average 778 rupiah per kWh under a power purchase agreement (PPA) or an increase of some 28%.

“The rate is very good compared with Malaysia where IPPs (independent power producers) get below 20 sen per kWh in selling power to Tenaga Nasional Bhd (TNB). Under the PPA, IME will sell the electricity to PLN for 20 years and the concession is renewable.

“IME is expected to generate between RM40mil and RM50mil in revenue a year when the power plant is commissioned. That would give us a good cash flow. The maintenance cost for hydro power plants is low,” he told StarBiz.

Toh said the Indonesian authorities encouraged foreign investments in power plant projects, and that SCB was the first foreign company that had made good progress in constructing a power plant project in that country.

He said PLN had offered IME to build two more hydro plant projects, one with designed generation capacity of 80MW and the other 10MW, in north Sumatra where there was strong growth in power demand due to rapid development, such as the plantation sector and increase in population and living standard of the people .

“The offer from PLN is for a direct negotiation (on power tariff). We are studying the offer and will make a decision within this year.

“We are very keen to undertake a second 10MW plant project there. (But) for the proposed 80MW plant project, we may have to look for an international joint venture partner because of the big investment involved,” he added.

State-owned Sarawak Energy Bhd, which is SCB’s second largest shareholder with a 16.5% stake, is scheduled to export power to west Kalimantan, Indonesia before end-2015. The construction of transmission lines and substations on both sides of the Sarawak-west Kalimantan border are progressing well and the new interconnection system would deliver 230MW of renewable energy to PLN.

Toh said that to increase its presence in Indonesia, SCB, which is Malaysia’s largest integrated manufacturer of power cables and conductors, might acquire an Indonesian cable maker which it had already identified. SCB, the first company in Asean having the capability to produce 275kV underground high voltage cables, is pushing for the export of its 132kV underground cables and overhead transmission line conductors to Indonesia. SCB recently acquired Universal Cable (M) Bhd and Leader Cable Industry Bhd that have established international customer base. The group is also involved in the fabrication and construction of transmission towers.

Back home, Toh said SCB was still exploring opportunities to build mini hydro power plants with ideal generation capacity of 10MW each in Peninsular Malaysia after its recent decision not to proceed with such projects identified earlier in Perak as their proposed generation capacities were too small. However, he said the group had no plan to bid for Sarawak Energy’s mini-hydro dam projects in Sarawak, including the first 10MW plant project in the northern region, of which the competitive bidding process was under way.

Toh said SCB group currently had a tender book of about RM1bil, where most of the projects that it had bid for were for construction of transmission lines and power substations from TNB and Sarawak Energy. In Sarawak, it had tendered for the Selanggau-Mapai transmission line project and the 275kV Tondong substation project.

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