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AKARTA: State power company PT PLN received a Rp 7.5 trillion soft loan from the state investment agency PIP with a tenure of 15 years and interest of 5.25 percent.

PLN president director Nur Pamudji revealed that his company would use the loan to close the financing gap caused by procurements and the replacement of transformers, the strengthening of installations, transmission and distribution facilities and other investments.

“The loan will be used to reimburse our investments. In 2011, we used around Rp 6 trillion, while the remaining Rp 1.5 trillion will be used next year,” he told reporters after signing the loan agreement at his office in Jakarta.

Saritoan Siregar, president director of PIP, said the loan had a five-year grace period, meaning that during the first five years, PLN would only be required to pay the interest on the loan, while the main capital would be paid off between the sixth and 15th years.

“So, starting in the sixth year, PLN will pay around Rp 750 billion per year plus the interest at 5.25 percent,” he explained.