JAKARTA: State-owned steel producer Krakatau Steel has proposed a Rp 2.4 trillion (US$180.86 million) capital injection in the revised draft of the 2016 state budget consisting of Rp 1.5 trillion cash and Rp 956 billion noncash injections, a company executive has said.
Krakatau Steel president director Sukandar said on Wednesday the company would allocate Rp 1.8 trillion of the money to fund a coal-powered 150-megawatt electricity plant and a new hot strip mill, adding that the two projects would cost Rp 9.25 trillion combined.
“The coal-powered electricity plant and the new mill will help Krakatau Steel reduce the cost of goods sold by at least $58 per ton,” Sukandar said.
Funding of the two projects will come from a Rp 4.79 trillion loan from Germany banks and Rp 4.46 trillion in equity.
“The switch to coal for power [production] will make electricity power prices lower. We estimate that the coal power plant electricity price will be 6 cents per kwh,” Sukandar said.
Lawmaker Azam Azman said the House of Representative would discuss the capital injection in a plenary meeting on Thursday.
