South Korean financiers urged to drop investment in Indonesian coal plants

Three financiers agreed to fund two 1,000MW coal plants for $1.67b.

Environmental groups in Indonesia have called on South Korean financiers Export-Import Bank of Korea (KEXIM), the Korea Development Bank (KDB Bank), and the Korea Trade Insurance Corporation (K-sure) to drop funding for two coal-fired plants that will be added to the Suralaya power complex in Jakarta, Indonesia.

Mongabay reports that the two plants will have a capacity of 1,000MW each and will be added to the power complex that already produces 3,400MW, equivalent to 18% of electricity for Java and Bali.

KEXIM, KDB Bank, and K-sure have agreed to loan the project $1.67b. Indonesian contractor PT Hutama Karya and Doosan Heavy Industries and Construction tied up to build the new plant.

The owner of the Suralaya complex, Indonesia Power, and the contracting consortium signed the agreement for the expansion project on 10 September in Seoul, South Korea.

Suralaya came online in 1984, when there were no regulations for nitrous oxide emissions. According to Greenpeace Indonesia, the site emits more NOx than any other facility in Southeast Asia.

Indonesia, like other Asian countries, is at the crossroads between coal and renewables. It launched its 35GW power plant installation target, but experts are sceptical as initial targets have been trimmed due to PLN’s lack of readiness for infrastructure.

Regulatory changes, such as procurement rule changes, local content, the 10% intermittency on grid policy, and the pressures on tariffs, power plant agreement (PPA), and the rupiah, have also slowed down the renewables scene in 2018.

Photo by satari, CC BY 3.0