KEPCO Board of Directors 'Reserves Decision' on Indonesian Coal-Fired Power Plant Project

[Asia Economy Reporter Dongwoo Lee] The Korea Electric Power Corporation (KEPCO) has faced a halt from its board of directors regarding the construction project of the Indonesia Java (JAWA) Units 9 and 10 coal-fired power plants.

On the 26th, according to KEPCO, the KEPCO board of directors submitted and reviewed the agenda for the Java Units 9 and 10 thermal power plant construction project but decided to 'defer the resolution.'

This project is a large-scale endeavor to build two 2,000 MW coal-fired power plants in Banten Province, western Java Island. The total project cost amounts to $3.46 billion (4.1 trillion KRW).

KEPCO, Indonesia Power (a subsidiary of the Indonesian electricity company), and Barito Pacific, an Indonesian power and petroleum specialist company, formed a special purpose company (SPC) to promote the project, with Doosan Heavy Industries participating in the power plant construction. Doosan Heavy Industries’ contract portion is valued at approximately 1.6 trillion KRW. KEPCO is investing $51 million (about 62 billion KRW) through a 15% equity stake.

The project faced setbacks last year when the Korea Development Institute (KDI) preliminary feasibility study rated it in the 'gray area,' indicating insufficient business viability. KEPCO reapplied for the preliminary feasibility study and passed the re-examination on the 9th of this month.

Environmental organizations such as Greenpeace and Climate Resolution protested, urging the suspension of investment, arguing that the project is unprofitable and causes environmental pollution due to massive greenhouse gas emissions.

The civic group Climate Solution recently evaluated in KDI’s second preliminary feasibility study that the project would incur an overall loss of about 53 billion KRW over its 25 years of operation, with KEPCO expected to suffer losses of approximately 8.5 billion KRW.

KEPCO interprets passing the preliminary feasibility re-examination as an indication of sufficient business viability and believes that the power generation project will be thoroughly pursued in compliance with international environmental standards.

This content was produced with the assistance of AI translation services.