(Yicai Global) Dec. 16 -- The first unit of Indonesia's largest power plant by installed capacity, which is 70 percent owned by China Shenhua Energy, has begun commercial operations.

The facility, about 100 kilometers northwest of Indonesian capital Jakarta, will cost around CNY12 billion (USD1.7 billion) in total, Shenhua said in a statement yesterday. Work began on the plant, set to house two 1,050 megawatt generators, in October 2017 and it will produce 15 billion kilowatt-hours of energy a year once complete, easing a shortage on the island of Java.

Shenhua has already begun debugging the second unit.

Indonesia is the fourth most populous country on the planet and the largest economy in Southeast Asia, but its per-capita power consumption was just a fourth of that of smaller neighbor Malaysia in 2017 due to a lack of infrastructure.

Shenhua and a subsidiary under state-owned Perusahaan Listrik Negara, which monopolizes Indonesia's electricity sector and owns the remaining 30 percent of the plant, agreed to build the facility under a 25-year build-own-operate-transfer model. That means Shenhua will handle the majority of the work and collect most of the profits for a quarter of a decade before shifting its stake to the Indonesian government.

The first unit performed well under trial conditions and emissions of soot, sulfur dioxide and nitrogen oxides were all considerably better than local standards, Shenhua's statement said.

Editor: James Boynton