China Huadian Engineering Company (CHEC) signed an agreement on Monday with local companies PT Dana Mulia Sukses and PT Radu Pratama to construct power plants in Indonesia.
The planned power projects may include coal fired, hydro, combined cycle, geothermal, and gas-fired power plants.
CHEC vice president Xu Bo said in a press conference that the main target would be to fulfill power demand in Java, which made up 75 percent of the total power demand in Indonesia.
"We will concentrate on establishing about 30 power plants in Java, starting this year," he told reporters through an interpreter.
"We plan to put emphasis on the development of hydro power, which is more environmentally friendly and the fact that Indonesia has so much water reserves," he added.
However, the company refused to reveal the value of the contract because further negotiations were still needed.
"The contract value will depend on the kind of power plants to be developed," he said.
There have been fears that Java and other areas in Indonesia would suffer a power crisis in the next two or three years because of fast growing electricity demand. To avoid blackouts, the cash-strapped government has been pushing private firms to invest in the country's power sector.
Xu was optimistic his company could meet Indonesia's demand for electricity because of CHEC's extensive experience in the sector.
He pointed out that CHEC operated 60 coal-fired and hydro power projects in China, the U.S., Chile, Argentina and Sudan.
"At the moment, the political and economic relationship between China and Indonesia is good and we see it as being opportune to begin the (power project) collaboration," he said, when asked whether he was concerned about the uncertainties plaguing the local power sector.
CHEC is a subsidiary of the state-owned China Huadian Corporation.
Currently, CHEC is one of the largest general contractors in China's power sector, and owns 116 power plants, with a combined power capacity of 31,090 megawatts.
"We plan to add between 4,000 and 5,000 megawatts per year worldwide, with Indonesia receiving a big portion of this," Xu said.