State-owned plantation firm PT Perkebunan Nusantara (PTPN) X revealed on Wednesday that it was in the process of developing a bio-ethanol processing facility in East Java that aimed to produce 30 million liters of bio-ethanol per year.
Finance director and bio-ethanol project adviser Dolly P. Bulungan said the project was expected to start commercial operations in March 2013.
“The facility will be the first bio-ethanol plant to be built by a state-owned enterprise,” he said.
“So far, construction is 2 to 3 percent complete, but we expect to start operations in March 2013.”
He said a total of US$48 million had been invested in the project. PTPN backed the project with $4 million of its own assets in addition to a $28.2 million loan from Bank Mandiri. A $16.6 million grant from Japan covered the remaining costs.
“The Japanese grant is channeled through a subsidiary institution of Japan’s Ministry of Trade. The grant is in the form of equipment such as fermentation and dehydration machines,” he said.
Indonesia is one of the world’s top biofuel producers. However, the country has thus far exported its raw bio-ethanol products instead of refining them further to meet domestic demand.
