26 April 2010 - A consortium building a 330 MW geothermal plant in Indonesia has reached a deal with the state electricity company to sell power at a higher price than first agreed, a member of the group said on Monday.
State-owned PT Perusahaan Listrik Negara (PLN) awarded a contract in 2006 to a consortium of Medco Energi Internasional, Ormat Technologies' unit Ormat International, Itochu Corp and Kyushu Electric Power to build the plant in Sarulla, North Sumatra.
The $1bn project has been held up in recent years after the consortium demanded a price revision.
According to Reuters, Ormat Technologies said in a statement on Monday that the consortium had reached an agreement with PLN to change the price of the power sold to 6.79 US cents per kilowatt. The sides also agreed that the tariff would be reduced in future.
They are expected to sign a financing deal within a year, after which the consortium will have 30 months to complete the first phase of the project with a capacity of 110 to 120 MW.
The project's final two phases are expected to be completed within 18 months of the first phase. Ormat, which develops and operates geothermal power plants, will benefit from more than $300m in equipment supplies for the project in which it has a 12.75 per cent stake.