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Pefindo raises PLN bond ratings on better subsidy scheme
Credit rating agency PT Pemeringkat Efek Indonesia (Pefindo) has raised bond ratings for PT Pembangkit Listrik Negara (PLN) from AA- to AA+, citing solid support given by the government to the state electricity producer, PLN's improved subsidized electricity payment schemes
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redit rating agency PT Pemeringkat Efek Indonesia (Pefindo) has raised bond ratings for PT Pembangkit Listrik Negara (PLN) from AA- to AA+, citing solid support given by the government to the state electricity producer, PLN's improved subsidized electricity payment schemes.
The AA+ rating will apply to the state electricity producer's existing bonds, worth Rp 10.54 trillion (US$1.16 billion), and to PLN's sharia bonds (sukuk ijarah), which are valued at Rp 1.56 trillion, state news agency Antara reported on Friday.
Pefindo also issued an AA+ rating for PLN's Rp 2.5-trillion bonds and for up to Rp 500 billion of sharia bonds that the state power company hopes to issue later this year, said a Pefindo report.
Government support of PLN was evident in presidential regulation No. 4/2010 and in energy and mineral resources minister regulation No. 02/2010, which supported and accelerated development of PLN's second fast-track 10,000-megawatt electricity production program, said the Perfindo report.
More government support was seen in January, when the South Sumatra local government did not immediately approve PLN's plans for a fast-track Asahan 3 hydropower station.
Vice President Boediono called the provincial governor directly and ordered him to complete the permit review process promptly.
The Chinese government pledged to provide funds for power plant construction as part of PLN's second electricity production program, said earlier reports. PLN's first program received Rp 89.91 trillion from Chinese banks, almost half of the total funds.
PLN's second fast-track program will use traditional energy resources, such as coal and gas, and alternative resources, such as hydropower, geothermal energy and coal bed methane (CBM). This will reduce PLN's operating expenses, said the Pefindo report.
PLN's new subsidized electricity scheme, which includes a gradual subsidy reduction for upper-class subscribers who use more than 6,600 volt-amperes, was also encouraging, said the Pefindo report.
The revised state budget says that this year's budget for subsidized electricity was Rp 55.15 trillion.
Last year, PLN booked a net profit of Rp 10.4 trillion, while in 2008, the state firm booked a loss of Rp 12.3 trillion.
PLN said that its improved performance last year could be attributed to a Rp 7.6 trillion profit from exchange rate fluctuations between the dollar and rupiah.
Indonesia's demand for electricity demand will continue to grow by 6.8 percent per year, according to an Energy and Mineral Resources Ministry report. (rch)
