Indonesia awards Chinese firm power plant project

JAKARTA, Dec 22 (Reuters) - Indonesia's state power firm PT Perusahaan Listrik Negara (PLN) said on Monday it has awarded a contract to China National Technical Import and Export Corp to build a 660 megawatt (MW) coal-fired power plant in Cilacap, Central Java.

The chinese firm was also awarded a contract in 2006 to build a 600 MW coal-fired power plant in West Java as part of the Indonesia government's crash programme to build a combined 10,000 MW of power plants.

The Cilacap project needed financing of $605 million and 2.4 trillion rupiah ($218.2 million), Fahmi Mochtar, PLN's president director, told reporters.

"PLN and the Chinese firm will seek the funding for the project," he added.

Mochtar also said PLN was looking to borrow $775 million to finance a 630 MW coal-fired power plant in East Java and a 1,050 MW coal-fired power plant in Pelabuhan Ratu in West Java.

Indonesia, the biggest economy in southeast Asia, is keen to encourage more foreign investment to support its economy and to funnel much needed cash to develop its power sector, while China is keen to increase its economic clout and influence in the region.

Indonesian officials have said domestic electricity demand is growing at around 10 percent a year.

PLN operates 25,000 MW of generation capacity, but most of its plants are ageing, so daily output is far below capacity.

($1=11,000 Rupiah)

(Reporting by Muklis Ali; Editing by Ed Davies)