Indonesia developer PT Tamboli Energy has signed a five-year agreement to sell power to ferronickel producer PT Antam Tbk from a proposed 20-MW hydroelectric project on the Tamboli River near Kolaka on Sulawesi Island.
Antam agreed to purchase 15 MW of peak load for its facility at Pomalaa, 63 kilometers away. The deal is expected to reduce Antam’s power costs from 8 to 10 percent, decrease its dependence on diesel fuel, and reduce its carbon emissions.
Tamboli Energy is to finance, build, and operate the run-of-river hydro plant and the transmission interconnection to Pomalaa. It has named PT Bukaka Teknik Utama of Indonesia its engineering-procurement-construction contractor.
Tamboli Energy is to bear the full investment cost of the power facilities. Signing of the power contract advances the project toward financial closure, expected in six months. Construction is expected to begin at that point, requiring 18 months.
Upon commercial operation, Antam has first right, but not the obligation, to purchase 75 percent of Tamboli’s capacity at 5.65 US cents per kWh for five years, less than half Antam’s current cost of 12.5 US cents/kWh. Tamboli is to sell the remainder to government utility PLN.