Fortum Leaves Anies' Sunter ITF Project, Will It Stop Again?

JAKARTA - Fortum Power Heat and Oy, a power generating company from Finland, has withdrawn from the Sunter Intermediate Treatment Facility (ITF) construction project. ITF Sunter is the program of DKI Jakarta Governor Anies Baswedan.

Head of the DKI Jakarta Regional Owned Enterprises Development Agency (BP BUMD), Riyadi, said that Fortum's exit from the waste-to-electricity development project was because DKI did not receive funding guarantees from the central government.

Thus, Fortum was reluctant to disburse a loan of US$240 or around Rp3.42 trillion from the International Finance Corporation (IFC).

"As far as I know, the Fortum requires funding that there must be a guarantee from the central government. Fortum is a foreign company," Riyadi said when contacted, Wednesday, June 2.

In addition, there is no agreement on a cooperation agreement for the sale and purchase of electricity between PT PLN Persero and PT Jakarta Solusi Lestari. PT Jakarta Solusi Lestari is a joint venture between PT Jakarta Propertindo (Jakpro) and Fortum Power Heat and Oy.

"One of them is because the agreement requires that the agreement has not reached the specified time. There is no electricity purchase agreement yet. There may be points that are not agreed upon. Until the specified time, no agreement has been reached," explained Riyadi.

However, Riyadi admitted that he did not know any further about Fortum's withdrawal from the Sunter ITF project. "BP BUMD only accepts reports that can be reported. This is a very technical matter. Jakpro understands better," he added.

For information, the DKI Provincial Government has carried out the gorundbreaking of the Sunter ITF since December 2018. The plan is that the Sunter ITF is able to convert heat energy from 80 to 90 percent of the volume of waste to produce electrical energy of 35 megawatts per hour. ITF Sunter is able to process 2,200 tons of waste per day.

PT Jakpro together with Fortum formed PT Jakarta Solusi Lestari (JSL) as the ITF management subsidiary. At the time of the company's establishment, PT Jakpro will own a 20 percent stake, while Fortum will own 80 percent because it has the technology and funding for ITF development.

JSL ownership during the construction process was 44 percent for Jakpro and 56 percent for Fortum. After the Sunter ITF is established, JSL will become the majority shareholder with a Build Operate Transfer scheme for 25 years.

Based on the supervision of Commission D for the Development of the DKI DPRD to the Sunter ITF location at the end of 2020, it turned out that the work had stalled. There hasn't been any development there.

"It has been years and there has been no resolution by Jakpro. We recommend that waste management be directly handled by the DKI Environment Agency," said Chairman of Commission D of the DKI DPRD, Ida Maheasy, to VOI.

According to Ida, there are a number of development plans that Jakpro failed to carry out and missed the deadline. These include the start date of construction work, the trial period, and the target date for commercial operations.

For example, Jakpro is committed to starting construction on January 21, 2020 until May 31, 2023. Unfortunately, until now no construction work has started.

Ida said that Jakpro's current problem is that it has not yet found investors. Therefore, he said, if the Sunter ITF project was handed over to the Department of Environment, it would be easier for investors to look at it.

"Actually, there are many third parties (investors) who want to take part. But these investors do not dare to enter if it is held by Jakpro, because it is only limited to BUMD. Jakpro is considered not to have the power to do that," explained Ida.