JAKARTA (TheInsiderStories) - State electricity company PT Perusahaan Listrik Negara (PLN) has set capital expenditure (Capex) of Rp120 trillion in 2017, up from Rp70 trillion last year. Most of the capex will be used to increase the company’s power plants installed capacity and developing transmission grids and substations, a company official said.
Finance Director of PLN Sarwono said 50 percent of the funds for the capital expenditure will come from external institutions and 50 percent from internal PLN cash flow. “We also have option to launch sukuk (syariah bonds), conventional bonds and other options, depending on the market condition. The actual value of the bonds will depend on the actual need,” Sarwono said.
Last year, Sarwono said, majority of capex funds were allocated to add power plants capacity as well as developing power transmissions.
Under the government’s 35,000 MW power plant development program, PLN has been given the task to develop 10,000 MW of power plants. “This is certainly not an easy thing to day and requires huge amount of funding. Thus, large portion of the capital expenditure will be used to add capacity and develop transmissions. We hope this capex will be all realized,” he said.
Of the 10,000 MW of power plants to be developed by PLN, 1,100 MW has started commercial operation (COD) beginning from early 2017 or 10% of the planned 10,000 MW. PLN President Director said land clearing and financial closing are the two major issues that often delaying the development of power plants.
Sofyan added that out of 34 power plant projects that have ceased their construction by the power plant project developers, 11 of them have been terminated and the remaining 23 will resume their construction by PLN. These projects have been abandoned by their developers due to various problems such as lack of financing support and so on. PLN hopes the construction of these 23 power plant projects, launched by the previous government, will be completed in 2018.
In 2016, PLN adds power capacity by 3,714 MW, in which 1,932 come from power plants that are operated and developed by PLN, and 1,782 MW come from independent power plants (IPP). PLN has also develop 2,859 kilometers of transmission grid, substations (G() with capacity of 14,123 MVA. In 2017, PLN expects to develop 4,000 km of transmissions.
Net profit dropped 29.1 percent
In 2016, PLN recorded net profit of Rp 10.55 trillion, fell 29.1 percent from previous year of Rp 15.59 trillion. Electricity sales reached Rp214.1 trillion, up 2.05 percent from previous year’s sales of Rp209.8 trillion. The total electricity sale reached 216 terra watt hour (TWH), or up 6.49 percent from 202.8 TWH in 2015.
Sofyan Basir said in general PLN’s performance in 2016 improved, judging from the additional installation of power capacity and transmission grids, which has improved national electricity penetration rate.
The net profit decline was due to a rise of financial charges and tax payment. Financial charges was recorded at Rp18.7 trillion, up from Rp17.54 trillion in 2015, while tax due was at Rp5.43 trillion, compared to tax revenues of Rp18.65 trillion. The rise of tax was due to assets revaluation. “However, the operational performance show a positive trend,” Sofyan said at press conference.
In 2016, PLN recorded total customers of 64.3 million, up from 61.2 million in 2015. Sofyan said he expects to get additional 4,000 MW of power plants this year as well as developing additional transmissions along 2,000 km. Most of the transmission projects will be located in Sumatera.
Sarwono added in addition to boosting the number of subscribers or customers, PLN will also undertaking efficiency measures in order to improve its bottomline results. This is done by replacing the expensive fuel used by its power plants by cheaper energy sources. In 2016, the company managed to reduce the cost of fuel by 35.03 percent to Rp22.8 trillion from Rp35 trillion in previous year. (*)