Semen Indonesia is to invest in a IDR638bn (US$54.4m) waste heat power generation facility in East Java as the company looks to reduce costs and move towards more environmentally-friendly energy sources.

The country’s leading cement producer is partnering with Japan’s JFE Engineering Corp for the 30.6MW plant, which will supply power to the company’s four lines at Tuban, East Java. The plant is scheduled to be completed by the end of 2016 and is expected to save Semen Indonesia up to 152MkWh annually, or some IDR120bn (US$10.2m).

“This will trim electricity costs in our company by up to 20 per cent,” Dwi Soetjipto, president director of Semen Indonesia, told the Jakarta Globe. He added that the power generator would also decrease the company’s CO2 emissions by 122,358tpa.

Semen Indonesia’s partnership with JFE Engineering was established under a joint crediting mechanisms program by Japan’s Environmental Ministry. With the partnership, Semen Indonesia will receive around 20 per cent of the project’s total required capital from Japan’s government and the remainder will be sourced from the company's internal funds.