Source: CNBC Indonesia

Date: 18 June 2021

PT PLN (Persero) received a grant of €1.2 million or around IDR 20.5 billion (assuming the exchange rate is IDR 17,129 per euro) from the French Development Agency—namely Agence Francais de Development (AFD)—to support the construction of a Hydroelectric Power Plant (PLTA) in Masang II, West Sumatra.

The Grant Agreement signed for the preparation stage of Masang II Hydroelectric Power Plant construction was carried out in Jakarta, Friday (18/6/2021). There were PLN President Director Zulkifli Zaini, AFD Indonesia Country Director Emmanuel Baudran, and French Ambassador to Indonesia Olivier Chambard.

"AFD has always supported PLN in developing electricity in Indonesia. This grant will support the Environmental and Social Impact Assessment (ESIA), yet Land Acquisition and Resettlement Action Plan (LARAP) for the Masang II hydropower project," said Zulkifli, as quoted from PLN's official statement, on Friday (18/06/2021).

This grant agreement is the second endorsement from AFD. Previously in 2017, AFD had supported PLN for a feasibility study for the same project.

"This showed AFD's ongoing commitment and support for the development of renewable energy in Indonesia," he said.

It should be noted that the Masang hydropower plant is a "run of river" hydropower plant with an estimated capacity of 44 MW. The Masang hydropower plant is targeted to operate in 2027.

Zulkifli explained that PLN's commitment to encouraging the development of New & Renewable Energy (NRE) in Indonesia is a tangible manifestation of PLN's transformation since April 2020. PLN has set its target to develop Renewable Energy in long-term planning for power plant expansion.

"To develop the potential, PLN will consider the balance of electricity supply and demand, the potential of local resources, reliability, sustainability, energy security, and economy," he explained.

AFD Indonesia Country Director Emmanuel Baudran explained that the environmental and social study assistance to PLN would assist in the preparation of a comprehensive environmental and social management plan to support renewable energy projects as part of project preparation.

"Moreover, the Masang II PLTA will contribute to the Indonesian government's target of having modern renewable energy sources," Baudran said.

He added that this was also in line with AFD's strategy to support the Government of Indonesia's plans to fight climate change, achieve sustainable development targets, and use public goods globally.Zulkifli added that PLN is committed to developing NRE plants to carry out their duties to electrify the entire country, Indonesia. Furthermore, through green aspirations in its transformation, PLN encourages the energy transition for the sake of future generations so that they can enjoy a better future.

In addition, PLN also supports all NRE investment and development opportunities in Indonesia through collaboration with government agencies, the private sector, and funding institutions through good corporate governance (GCG).