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PLN secures $500m ‘green loan’ for hydro, geothermal plants
The loan provides working capital for PLN to buy electricity from seven existing renewable energy projects.
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Indonesia's oldest geothermal power plant (PLTP), the Kamojang plant in West Java. (PLN/PLN)
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tate-owned electricity giant PLN has secured a US$500 million “green loan” with a guarantee from the World Bank’s Multilateral Investment Guarantee Agency (MIGA) to keep seven renewable energy projects alive during the pandemic.
The electricity distribution monopoly wrote in a statement on Monday that MIGA would guarantee 95 percent of the loan for five years through its first Non-Honoring of Financial Obligation by State-Owned Enterprise (NHFO-SOE) guarantee scheme.
The money comes from a consortium of international lenders including the United States’ JPMorgan, Singapore’s Oversea-Chinese Banking Corporation (OCBC), Germany’s KfW IPEX-Bank and Japan’s Sumitomo Mitsui Banking Corporation (SMBC).
“In a period of difficult liquidity and loan markets, PLN achieved financing cost efficiency by implementing a structure that attracts international creditors,” said PLN finance director Sinthya Roesly in the statement.
She added that the loan was secured “fairly quickly” as negotiations had begun in July.
Read also: ADB, PLN to pilot issuance of energy transition bonds in 2021
MIGA, in a proposal published online, wrote that the loan’s purpose was to provide working capital for PLN to buy electricity from seven existing renewable energy projects. PLN is required to repay the loan in US dollars.
