REPUBLIKA.CO.ID, JAKARTA -- PT Semen Indonesia (Persero) Tbk will build an environmentally friendly power plant at a cost of Rp638 billion in Tuban, East Java.

The state owned cement producer will team up with JFE Engginering Corporation of Japan, to build a Waste Heat Recovery Power Generation (WHRPG) plant which will have a capacity of 30.6 megawatts.

An agreement on the project was signed here on Tuesday by Dwi Sutjipto the president director of Semen Indonesia and Tetsuo Tsuyuguchi the Managing Director of JFE.

Dwi said the WHRPG power plant would allow the company to reduce the use of around 152 million kWh of electricity per year from the state electricity company PLN or saving Rp120 billion a year.

Construction is expected to take 24 months ir it would be operational by the end of 2016, he said.

The project has a local content of 52 percent with the rest imported supplied by JFE.

"The Japanese government will help provide 20 percent or Rp127.6 billion of the cost with Semen Indonesia putting up the rest or Rp510.4 billion," he said.

JFE is an agency under the Japanese ministry of environment for the program of "Joint Crediting Mechanism" (JCM) aimed at reducing carbon emission.

The project will contribute to reducing carbon emission (CO2) by 122,358 tons per year.

The use of environmentally friendly technology in the Tuban cement factory is the second by the company after the first such power plant built in the Indarung cement factory in West Sumatra with a capacity of 8.5 MW since 2011.

"Cement industry is among the industries suffering the most with the increase in the electric tariff in 2014.The company, therefore, has to be innovative and improve efficiency in energy consumption," Dwi said.

Having own power plant is one of the strategies adopted by the country's largest cement producer, he said.

"Manage Energy Security to reduce dependence on PLN is a critical aspect to guarantee sustainable growth," he said.

In February 2014 , a subsidiary of Semen Indonesia, Semen Tonasa, officially set into operation a 70 MW power plant bringing its total power generating capacity to 120 MW, making it the first cement producer self sufficient in power supply in Indonesia.

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