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PLN secures final financing needed for first 10,000 MW power plant crash program
State power utility PT PLN has secured all the financing needed to finalize construction of power plants under the government’s first 10,000 megawatt (MW) fast-track program, paving the way for completion by 2013 as scheduled
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tate power utility PT PLN has secured all the financing needed to finalize construction of power plants under the government’s first 10,000 megawatt (MW) fast-track program, paving the way for completion by 2013 as scheduled.
Helping hand: State power utility PT PLN president director Fahmi Mochtar (right) shakes hands with Finance Minister Sri Mulyani Indrawati during the signing of loan agreements between PLN, four state banks and the Bank of China at the Finance Ministry Monday. PLN plans to use the loans to complete financing of the 10,000 megawatt (MW) fast-track power program. JP/R. Berto Wedhatama
“The commitments [for financing the power plants] are now secured. Mission accomplished,” PLN vice president director Rudiantara said Monday at the Finance Ministry after PLN signed six loan agreements with various banks to finance power plants and transmission projects.
He said the total financing needed to construct the power plants under the program is US$5.65 billion and Rp 23.2 trillion (about $2.9 billion). PLN provides 15 percent of the total, the remaining 85 percent is from bank loans and bond issuances.
While the financing for the construction have been secured, Rudiantara added that PLN is still looking for financing for associated transmission line projects from loans and bond issuances, amounting to $800 million and Rp 920 billion.
Transmission lines are used to deliver electricity from power plants to sub-stations near populated areas for distribution to customers.
PLN president director Fahmi Mochtar said the 10,000 MW program is expected to be finished in 2013.
“In 2010 more than 50 percent [of planned power plant construction] will be finished.”
Under the program PLN is constructing 33 coal-fired power plants, 10 in the Java-Bali system and 23 off Java-Bali, PLN said in a statement.
“Electricity is important infrastructure. Electricity demand increases along with rising economic growth and increasing people’s incomes, which causes PLN to respond,” said Finance Minister Sri Mulyani Indrawati.
She said the government would support PLN, through policies and loan guarantees, to ensure that it could provide electricity throughout Indonesia.
The government is aiming to boost growth in the real sector in the next five years of the new administration. Economic growth is expected to reach seven percent in 2014, above the estimated 4.3 percent this year.
On Monday, PLN signed a loan agreement with the Bank of China worth $371.5 million to finance the construction of a power plant in Tanjung Awar-awar in East Java.
The agreement is backed by China’s state export credit guarantee agency Sinosure, PLN said in the statement. The loan will mature in 13 years, with a three-year grace period, with interest calculated on a LIBOR-based floating rate.
PLN also signed syndicated loans worth Rp 4.8 trillion with four of Indonesia’s largest banks — Bank Mandiri, Bank BNI, Bank BRI and Bank BCA — to finance power plants and transmission projects.
These loans have a maturity of 10 years, with a three-year grace period, also calculated with a LIBOR-based floating rate.
Fahmi said the syndicated loans were the first bank loans of this type for transmission projects.
