Costing USD 180M, 110-hectare plant will provide power for roughly 120,000 households across Java and Bali when completed in 2014.
PT Pertamina said that the plant will convert 2,000t of waste to energy a day, and expect to sign a follow-up agreement cementing the deal by December this year.
Director of Pertamina Gas, Karyuliarto Day, said: "The project is [in conjunction with] government regulations that are very conducive to the growth of investment in this sector."
