PT Indonesia Power, a subsidiary of state electricity firm PLN, will launch its initial public offering (IPO) later this year to raise fresh funds for the expansion of the company's power supply.

Abimanyu Suyoso, one of the company's senior executives, said in Sanur, Bali on Friday that Indonesia Power hoped to sell 10 percent of the company's expanded shares during the IPO which would be carried out between September and October this year.

"We hope to raise fresh funds of about Rp 4 trillion (US$421 million) from the public offering," he said after signing an agreement with the company's labor union on the resort island.

After launching the IPO and listing the shares on the capital market, the company would also raise loans from a syndicated loan to meet the company's investment needs which were expected to reach Rp 7.2 trillion.

Indonesia Power, which has taken over from PLN the management of power supply on Java and Bali for almost 11 years, currently operates eight power plants located in Tanjung Priok (Jakarta), Suralaya, Saguling, Kamojang (West Java), Mrica, Semarang (Central Java), Tanjung Perak-Grati (East Java), and Bali, with a total capacity of 7,332 MW.

Abimanyu said electricity demand on Java and Bali reached 14,000 MW during peak hours and grew by 8.3 percent each year. The remaining power needs are supplied by independent power producers.