Kyushu Electric to Launch Geothermal Biz in Indonesia

Fukuoka, April 4 (Jiji Press)--Kyushu Electric Power Co. <9508> will launch a large-scale geothermal power generation business in Indonesia with major trading firm Itochu Corp. <8001>, the power utility said Thursday. It will be the first time for a Japanese power firm to undertake geothermal power sales overseas. The total project cost is expected to be around 100 billion yen. With the upcoming liberalization of electricity retailing expected to intensify competition in the Japanese market, Kyushu Electric hopes to strengthen its financial base through business expansion overseas, company officials said. Kyushu Electric and Itochu have each invested 25 pct of the total cost of setting up an operating company for the project in Indonesia. The remaining 50 pct is being provided by major local power firm PT Medco Power Indonesia and a U.S. company. Through the joint venture, the companies concluded on Thursday a 30-year contract to provide electricity from the project to Indonesia's state-run power firm PT PLN and another local concern. Aiming to start operations in 2016, they plan to set up three geothermal power plants in Sarulla, Sumatra. The combined output capacity of the plants will be 330,000 kilowatts, equivalent to the capacity of a midsize thermal power plant. It is expected to be the country's largest-scale geothermal power generation project, according to Kyushu Electric. Indonesia, known for its rich geothermal resources, is pushing forward with its plan to expand geothermal power projects in the country. Kyushu Electric hopes to establish a new source of revenue in Indonesia by utilizing know-how it acquired by operating geothermal power plants in Japan, the officials said. It currently runs five geothermal plants in its home market, including the large-scale Hacchobaru plant in southwestern Japan prefecture of Oita. END