TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
PLN secures Rp 12t loan from state lenders
Change Size
Electrifying deal: After the signing of a syndicated loan agreement for PLN on Friday (left to right) State-Owned Enterprises Minister Rini Soemarno, PLN president director Sofyan Basir, Bank Rakyat Indonesia (BRI) president director Asmawi Syam, Bank Mandiri president director Kartika Wirjoatmodjo and Bank Negara Indonesia (BNI) president director Achmad Baiquni pose with the document. (Antara/Rivan Awal Lingga)
S
tate-owned electricity firm Perusahaan Listrik Negara (PLN) has secured loans worth up to Rp 12 trillion (US$916.8 million) from state lenders to help fund the government’s ambitious project to build enough power plants to produce an additional 35,000 megawatts (MW) of electricity for the country.
The loan agreement with Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) was signed on Friday and will mature within one year.
PLN plans to use the loan to fund the construction of an electricity transmission network connected to the new plants.
“It will be used for the 35,000 MW project, which requires almost Rp 170 trillion within the next five years for the transmission lines alone,” PLN president director Sofyan Basir said after signing the agreement.
It means PLN will need Rp 34 trillion per year, 20 to 30 percent of which will be provided by the firm itself. “The rest will be covered by loans,” Sofyan said.
PLN currently has 54 million customers and generates 70 percent of the electricity used in the country. It expects to raise more funds through a global bonds issuance to raise between $1 billion and $2 billion early next year.
The firm is now more relaxed about securing loans after the government issued a new regulation that gives two guarantees to PLN’s several projects, namely the 35,000 MW program, the construction of 46,000 kilometers of transmission lines and other supporting infrastructure.
One of the guarantees is a loan guarantee, to be given to financial institutions that provide financing to PLN as a loan repayment assurance, which is part of the government’s effort to support the company’s electricity procurement business plan.
Among all PLN’s programs, the 35,000 MW project has been a top priority as it is expected to increase the country’s electrification rate to 97 percent in 2019 from the current 88.3 percent. At present, Indonesia’s electricity supply remains the lowest in Southeast Asia despite having the region’s largest economy.
However, only 195 MW of the new generation capacity is already in operation, representing a tiny 0.5 percent of the target, as the PLN has been facing various problems since the program’s launch in mid-2015.
The problems range from a lack of potential partners, financing and land acquisition difficulties, to an open dispute between Sofyan and former energy and mineral resources minister Sudirman Said over the minimum price for electricity produced by micro-hydro power plants.
Nonetheless, the company claims to have sealed development contracts for power plants with a combined capacity of 16,515 MW as of Aug. 4 and hopes to complete the signing of the contracts for the remaining 18,485 MW by year-end.
PLN director for corporate planning Nicke Widyawati previously said that maintaining a daily peak demand reserve of 30 percent throughout the process was equal in importance to its pursuit of the additional 35,000 MW of electricity.
“We are actually optimistic that we can deliver the 35,000 MW project, but what is more important is how to maintain a 30 percent load balance at the same time.”
Meanwhile, during the loan signing, Mandiri, BNI and BRI also agreed to increase the amount in the working capital credit line given to PLN to Rp 20 trillion from the current Rp 15 trillion. Each lender will set a Rp 4 trillion loan ceiling within a period of 10 years. (vps)
