PLN set to secure more loans for projects

Aditya Suharmoko and Ika Krismantari ,  The Jakarta Post ,  Jakarta   |  Sat, 04/19/2008 12:26 PM  |  Business

State-owned power company PT Perusahaan Listrik Negara (PLN) is slated to secure additional loans to immediately finance the construction of its 35 power plants under the government-sponsored 10,000 megawatts (MW) emergency power project.

PLN President director Fahmi Mochtar said on Friday the firm would sign another deal worth Rp 7.3 trillion (US$794.77 million) with Bank Mega and Bank Bukopin later this month to fund 12 coal-fired plants.

Bank Mega is set to disburse a total Rp 4.61 trillion to finance 10 projects -- Pelabuhan Ratu (945 MW), Lampung (200 MW), North Sumatra (400 MW), Riau (14 MW), East Nusa Tenggara (14 MW), West Nusa Tenggara (50 MW), Gorontalo (50 MW), North Sulawesi (50 MW), Southeast Sulawesi (20 MW) and Central Kalimantan (120 MW).

Bank Bukopin, meanwhile, is set to channel Rp 1.6 trillion toward the construction of 945 MW plant in Teluk Naga, and Rp 1.04 trillion for 630 MW plant in Pacitan.

PLN and a consortium of local banks -- Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Mega and Bank Central Asia -- signed a deal worth Rp 5.7 trillion Friday to finance the construction of five power plants in Suralaya, Paiton, Labuan, Indramayu and Rembang.

"With all of the loans, we have met all the rupiah-denominated financing needed for the 10,000 MW program," said Fahmi.

Finance Minister Sri Mulyani Indrawati, who attended the signing ceremony, said the government would closely supervise PLN's use of the loans.

"With all the loans, PLN must fulfill the country's electricity needs by the end of 2010," said Mulyani.

PLN needs some $8.3 billion in total to meet the 10,000 MW crash program, which is scheduled for completion in 2010.

With the program, the government has expected electricity coverage to reach all areas nationwide by 2010. Around 45 percent of the country's 230 million people do no have sufficient access to power supply.

The country currently produces a total of 29,000 MW.

PLN is now seeking to secure the financing shortfall for the crash program amounting to $2 billion by exploring an overseas financial resource scheme, such as through bilateral agreement or financial institutions.

"We will go to a number of countries, including China," Fahmi said.

PLN finance director Setyo Anggoro Dewo, said the firm was considering issuing middle-term notes to plug financial needs.

"We are still calculating the amount of dollars owned by local banks to help finance the program. But because of the current economic condition I think it is better to seek the loans from overseas institutions," said Setyo.

China Export Import Bank and UK-based bank Barclay are among the foreign banks expressing interest in funding the 10,000 MW program.

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