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AIIB to approve $500m loan for PLN power transmission improvement
The US$500 million loan will go to the Indonesia PLN East Java and Bali Power Distribution Strengthening Project and be channeled to state-owned electricity giant PT PLN.
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Fix it fast: Several technicians of state-owned electricity company PLN replace a damaged isolator in Jakarta. (The Jakarta Post/Dhoni Setiawan)
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eijing-based multilateral development lender Asian Infrastructure Investment Bank (AIIB) is set to approve a government loan proposal for the improvement of the country’s electricity distribution.
The US$500 million loan will go to the Indonesia PLN East Java and Bali Power Distribution Strengthening Project and be channeled to state-owned electricity giant PT PLN.
“The project will probably be approved by the bank’s board in September,” said AIIB vice president and chief administration officer Luky Eko Wuryanto. “It’s really subject to the board’s approval.”
The core of the project, he went on to say, is to strengthen power transmission across Java, particularly in its eastern part, where the output capacity is the most reliable compared to other regions.
A summary of the projects states that it will contribute to PLN’s first five-year development plan for East Java and Bali under the 2019-2028 Electricity Business Plan (RUPTL), which includes the construction of 17,000 kilometers of medium-voltage distribution lines and the installation of 1,500 megavolt amps (MVA) of medium-voltage distribution transformers.
AIIB’s loan will cover almost half of the total costs needed to build and install the $1.05 billion transmission system. PLN is set to bear the remaining $550 million.
The government will act as the guarantor of the loan, which has a February 2024 closing date.
