Gunung Megang Gas Power Plant

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In March 2006, PT. Metaepsi Pejebe Power Generation (Meppogen) started the construction of first Phase (Phase I) Gunung Megas gas powered power plant 2 x 40 MW. The plant began commercial operations in November 2006. The construction for the second phase (Phase II) 2 x 40 MW was expected to start in January 2007 with the commissioning phase in October 2007. The second phase was susbequently expected to enter commercial operations in late 2008, but this could not be confirmed. The cost was estimated to be around US$45 million. The financing was to come from Meppo-Gen, which had issued and paid-up share capital of US$10 million, and a US$25 million loan from a local bank, PT Bank Internasional Indonesia ("BII"). The plant was to be located in Gunung Megang, Muara Enim District, South Sumatra Province. The produced power was to be connected to South Sumatra-Riau grid. The gas supply for the power generation was secured through a purchase agreement with Medco E&P. The power purchase agreement was signed on November 2005 between Meppogen and PLN. In the contract, PLN was scheduled to purchase 80% of the power output generated by the plant for a period of 20 year. PT Meppo-Gen was a joint venture company of PT Metaepsi, PT Pembangkit Jawa Bali (a subsidiary of PT Perusahaan Listrik Negara or PLN), PT Widjayatunggal Sejahtera, and Portek International Ltd [Singapore]. This project was considered environmentally friendly due to the usage of natural gas and applied for Clean Development Mechanism (CDM) as part of Certified Emission Reductions (CER) program endorsed by the United Nations based on Kyoto Protocol Agreement.