Reliance Power is to invest USD 5 billion, one of the largest foreign investments ever in the country, in two power and infrastructure projects in the South Sumatra and Jambi provinces of Indonesia. The investment covers coal mining, setting up of railway lines, ports and power projects.
Reliance Coal Resources, a subsidiary of Reliance Power, will sign two MoUs with representatives of the governments of both the provinces in New Delhi on 1 February. Reliance ADA group chairman Mr Anil Ambani and Indonesian president Susilo Bambang Yudhoyono are exected to be present on the occasion.
The project in South Sumatra involves development of a 2 billion MT coal mine, a 200 km railway line, a port and a 2000 MW power project at a cost of USD 3.5 billion. The project in Jambi involves another coal mining unit, along with a port, railway line and a small power plant. It will cost USD 1.5 billion without the power project.
Fiscal concessions, including land, are being offered to Reliance Power to make it attractive for them to invest in Indonesia. The investment for the development of the coal mine, rail & port infrastructure and the power project in Sumatra would be made in the next five years.
In 2010, Reliance Coal Resources acquired three coal mines owned by two companies PT Sriwijaya Bintang Tiga Energi and PT Brayan Bintang Tiga Energi in the South Sumatra province. The three mines are spread over 125 000 acres and have over 2 billion tonnes of coal. The product of these mines will be exported for Reliance Power’s Krishnapatnam Ultra Mega Power Project in Andhra Pradesh.
