Indonesia's electricity production gets needed spark from World Bank

World Bank's IFC has bought an 11 percent stake in a unit of Medco Energi to spur investment in the non-government electricity sector.

The investment aims to prompt private-sector investment in independent power producers “while demonstrating the viability of cleaner-energy sources,” said Sarvesh Suri, the global body’s country manager.

The deal is part of a $112 million equity investment, arranged by a consortium of investors led by Saratoga Capital, to assist Medco Power in building five additional power projects. But the value of the investment by the International Finance Corporation was not disclosed when the purchase was announced on Friday.

The projects would increase the company’s total generating capacity to about 390 megawatts.

In the state-owned utility Perusahaan Listrik Negara’s 2011-2020 electricity supply plan, it forecasted that Indonesia would need an additional 55,346 megawatts in power over the decade, with about 57 percent of the necessary power supply — 31,363 megawatts — to be generated by PLN, while the balance — 23,992 megawatts — will be met by private-sector producers, under the plan.

PLN estimates that investment of $96.2 billion is required but says it will only be able to provide $60.5 billion.

Under the plan, the percentage of households that have access to electricity will increase from the current 65 percent to 100 percent by 2020.

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