The 30-year deal for the power of the dam called Bakun

Posted on May 27, 2011

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This Gawai Dayak will be most memorable for Sarawak in more ways than one.

It’s because THIS Gawai Dayak will also mark the day the all-important power purchase agreement (PPA) for electricity produced by Bakun hydro dam will be signed.

The main parties involved in signing the agreement are Sarawak Energy Bhd (of Sarawak) and Sarawak Hidro Sdn Bhd (of Malaysia).

Basically, the deal sets the price for Sarawak Hidro to sell power to Sarawak Energy.

But what’s the big deal about this deal, you may ask.

Well, the big fat deal is that this PPA deal will set the terms for how much the State will have to pay for electricity generated from the dam called Bakun…for the next 30 years.

Although the Federal government has had a hard (and expensive) time to get the dam completed, the State government hasn’t had it easy either, when it comes to getting this dam ready.

I believe that when setting the final price for the power, both parties would have surely considered all the hardships that we all have gone through.

This is especially so for those Sarawakians, who were re-settled in places like Sungai Asap, to help ensure that Sarawak would be able to develop at a much greater pace in the future.

For those Sarawakians, who were directly affected by the Bakun Dam project, I hope they are consoled by the fact that their sacrifice looks set to pay dividends for the State as a whole, especially judging by the number of investors who have signed on to take advantage of Bakun’s power.

These include major investors like Smelter Asia Sdn Bhd, Press Metal, OM Materials, Asia Minerals Ltd and Tokuyama Corp; with investments of up to Rm14.3billion, aiming to use a combined 1,900MW for their new operations in Bintulu’s Samalaju Industrial Park.

1,900MW! And the dam called Bakun can only generate up to 2,400MW!

With all these people setting up shop in our SCORE, this all means that more jobs will be created and more revenue will be generated for the State.

A PPA that is fair to Sarawak would also help to ensure that the State would be able to carry out more projects to speed up the development of our SCORE.

And that’s definitely something to drink about this Gawai Dayak. Cheers!

How The Borneo Post announced the date of the PPA announcement:

Sarawak to seal deal to purchase Bakun power

Posted on May 27, 2011, Friday

KUCHING: Sarawak Energy Bhd (SEB) and Sarawak Hidro Sdn Bhd (Sarawak Hidro) will seal the power purchase agreement (PPA) for Bakun Hydroelectric dam in Kuala Lumpur on June 1.

In announcing the deal, Chief Minister Pehin Sri Abdul Taib Mahmud said the power from Bakun dam would be exclusively used for the Sarawak’s industries.

“We will sign an agreement on the first of June to buy the power from Bakun at certain specific price, which is quite favourable to the state,” he told the press after chairing the monthly state cabinet meeting at Wisma Bapa Malaysia here, yesterday.

However, Taib did not disclose the cost and when asked whether the electricity generated by Bakun dam would be sold at six sen per kilowatt hour, he replied: “You want me to say something before the ceremony?”

Public Utilities Minister Datuk Amar Awang Tengah Ali Hassan also refused to reveal the cost but said it would be revealed during the signing ceremony in Kuala Lumpur on the first day of Gawai Festival.

The Second Planning and Resource Management Minister said the Bakun dam was expected to produce about 300 megawatts of electricity when the first turbine started operation at the earliest in July this year.

He also confirmed that the state government was imposing some amount as water levy on Sarawak Hidro annually.

“The levy for water to generate electricity has to be charged but I am not sure how much. It was in the licence before. That is one of the conditions when we issued the licence for Bakun,” he said.

Awang Tengah added the levy would continue even after the Bakun dam came into operation.

According to a government portal, the Bakun dam, located on the Balui River in the upper Rejang River basin and 37km upstream from Belaga, is the world’s second tallest concrete rock-filled dam.

When all the eight turbines become fully operational, the Bakun dam will be able to generate up to 2,400 megawatts of electricity.

Sarawak Hidro, a wholly-owned unit of the Ministry of Finance, is the developer of the dam.