The development of Coal Fire Power Plant in The Region Of Indra Giri Hilir Riau the writer tries to implement capital budgeting method in the investment decision making by analyzing the interest and the fluctuation of the inflation.The method that I use in this thesis is Research Methodology which is descriptive analysis for the working performance. The analysis is based on the investment analyzing method which is NPV, IRR and Payback Period. The sources of the data that I used in this research is a primer data which are the price of the equipment, raw materials, and accessories and secondary data which I had from literature and booklist.The analysis shows that Coal Fire Power Plant which used Coal as their Energy was operated in Indonesia since 1962 and the capacity was 25 MW an they used very simple equipment. Initial investment cost for 14MW is Rp.133 bio by using the assumption that I had from the Power Plant construction done by PT. Muba Can Power. The interest rate is 14,94% for long term loan which the said company used for ehnancing this project. The NPV calculation is positive meaning the project is reasonable. The calculation for IRR by trial and error ended up for IRR 15,5822%. The calculation of Payback Period shows that the initial investment can be paid within 15 years. Inflation could influence the investment climate. With the inflation rate 6% and 8% the NPV still on the positive side. Based on the above calculation on the NPV, IRR and Payback Period this Project is visible with the recommendation that the company have to be efficient in production and selling price.