The Jakarta Post
State-owned gas distributor PT Perusahaan Gas Negara (PGN) is considering issuing global bonds to support its capital expenditure (capex) and accelerate progress in infrastructure development.
PGN CEO Gigih Prakoso revealed Thursday that his company had been reviewing the possibility of issuing global bonds. However, he specified neither the amount of global bonds nor when exactly they would be issued.
PGN has allocated some US$500 million for this year’s capex, US$350 million of which was supported by a bridging fund from Bank Mandiri. The company spent 30 percent of the capex in the first half of this year.
“We have been reviewing [the possibility],” Gigih told a discussion at the State-Owned Enterprises Ministry. “We will announce it to the market as soon as we find it necessary to seek extra funding.”
Gigih acknowledged that the company could not rely on short-term capital like the bridging fund and said it needed to have a sustainable long-term fund.
He said the company was aware of the success of other state-owned enterprises such as PLN and PGN holding company Pertamina, which had seen positive results from the issuance of global bonds.
“Pertamina and PLN have secured funding for the next 10 to 30 years by issuing global bonds,” Gigih said. “Looking at what they have done, we want to do the same thing as a bridging fund is not enough to fulfill long-term needs.”
PGN aims to develop new infrastructure in 2019 to answer to a rising demand for gas energy. Gas energy is projected to comprise 22 percent of the total energy needed in Indonesia by 2025. PGN became a gas subholding company after acquiring PT Pertamina Gas, a subsidiary of Pertamina, for US$1.3 billion last year.
Gigih said the company planned to build some 600 kilometers of transmission and distribution pipelines as well as LNG storage sites in the eastern part of the country.
Furthermore, the company would support the government agenda of switching from fossil fuel to gas energy within the transportation sector and provide gas to about 78,000 new household consumers by year-end. (asp)