Business News

Monday, 19 June 2017

SCB’s Sumatra plant set to begin ops in Q3

KUCHING: Sarawak Cable Bhd’s (SCB) maiden mini hydropower plant in northern Sumatra, Indonesia, whose completion had been delayed, is now set to commence operations in the third quarter of this year.

Managing director and chief executive officer Aaron Toh Chee Ching said the construction of the plant has been progressing well after technical issues were resolved.

The construction job is undertaken by an Indonesian contractor.

“We manage to clear the hiccups related to land compensation issues, weather and site conditions, government red tape, regulation changes and so forth,” he told StarBiz. Toh said installation of the plant’s turbine would be carried out soon, and testing and commissioning of the plant was scheduled by the third quarter. The plant was supposed to have been operational in late 2015.

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

The project is SCB’s first major investment abroad in renewable energy.

The electricity generated by the plant would be sold to Perusahaan Listrik Negara Persero (PLN), the Indonesian utility body, for 20 years.

The concession is renewable.

According to Toh, once commissioned, the plant could generate an annual cashflow of about RM20mil at an effective production rate of 80%.

“Notwithstanding the increased budget owing to delayed construction, the power plant remains an attractive investment with reasonably good returns,” he added.

On PLN’s earlier offer to SCB to build more hydro dams in Sumatra, Toh said the company was not considering the offer.

SCB is eyeing Indonesia as a new market for the sales of its power transmission cables.

The company is also working with an Indonesia partner to bid for power transmission line projects there.

Tags / Keywords: hydro , power , plant

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