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Ministry provides credit guarantee to PLN to speed up 35,000 MW projects
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A technician of state-owned electricity firm PLN checks the electrical network in Jakarta. (Antara/Akbar Nugroho Gumay)
T
he Finance Ministry will provide a credit guarantee to state-owned electricity company PT PLN to help President Joko “Jokowi” Widodo's ambitious goal of developing 35,000 megawatt (MW) power plants.
PLN was assigned to develop electricity in the country using two schemes: self-management through its own capital or loans and purchasing electricity produced by private companies, the Finance Ministry's financing and risk management director general Robert Pakpahan said in Jakarta on Tuesday.
In the first scheme, the Finance Ministry would provide credit guaranteed to the lender to ensure that the project is supported by the government.
"The credit guarantee is a full guarantee. The government will take over if PLN experiences a late payment," said Robert, adding that the facility was stipulated in the Finance Minister Regulation (PMK) No: 130/2016.
Meanwhile, in the second scheme, the government would provide PLN with a guarantee to ensure its financial feasibility toward power providers. "This will ensure PLN capabilities to fulfill its financial obligation," he went on.
With this regulation, Robert continued, each time PLN builds electricity infrastructure, whether self-managed or in cooperation with power developers, the ministry will process credit guarantees and feasibility guarantees to support electricity infrastructure projects. (bbn)
