JAKARTA (TheInsiderStories) – Indonesian power producer, PT Perusahaan Listrik Negara (PLN) received syndicated loan of US$1 billion from eight foreign banks, said the management on Tuesday (11/12). Most of the funds will be used to complete the 35,000 megawatt power (MW) plant projects.
According to the CEO, Sripeni Inten Cahyani, the eight banks are DBS Group, Korea Development Bank, MUFG Financial Group, Oversea-Chinese Banking Corp, Sumitomo Mitsui Financial, United Overseas Bank, Bank of China and Cathay United Bank. Each banks distributed loans worth of $128 million, she adds.
To date, around 23,000 MW of the 35,000 MW of the power plant have entered the construction stage. Beside for the mega projects, PLN will also use funds to build new transmission networks.
The state-owned company is currently intensifying the construction of a new transmission network in the Java – Bali interconnection area to anticipate mass power outages throughout the region.
So far, PLN had obtained funding through the issuance of global bonds worth of $1.5 billion. Same as the syndicated funds, funds from the issuance of global bonds are also used to prepare electricity infrastructure.
The global bond consisted of three tranche, which were $500 million with a 10 years and three months tenor, $500million with a 30 years and three months tenor, and $500 million with a 12 years tenor, and coupon rates of 3.37 percent, 4.37 percent and 1.87 percent, respectively.
The funds were expected to increase the electrification ratio to 100 percent by 2020. Additional funds were also expected to be able to accelerate the development of frontier, outermost, and disadvantaged regions.
During first half of 2019, PLN posted a net profit of Rp7.35 trillion. The profit was inversely from the same period last year which lost Rp5.35 trillion.
Finance director Sarwono Sudarto revealed the profit came from electricity sales which grew 4.95 percent to Rp133.45 trillion as of June 2019. Sales growth came from electricity sales volume which increases by 4.41 percent to 118.52 Terra Watt hours (TWh).
The increase in electricity volume consumption is also supported by the increasing numbers of customers, which until the end of June 2019 has reached 73.62 million.
“The increase in the number of customers has pushed up the national electrification ratio from 98.3 percent at the end of 2018 to 98.81 percent at the end of June 2019,” he explained.
Despite increased sales, the power producer’ operating expenses rose 7.08 percent from Rp142.43 trillion in the same period last year to Rp152.51 trillion. The business cost component with the largest increase came from the burden of private electricity purchases, which was 9.52 percent to Rp41.4 trillion.
The increase in electricity purchase costs occurred along with the entry of several Independent Power Producers (IPPs) to supply power to PLN. Meanwhile, fuel costs dominate 43 percent of the total operating costs, with gas being the largest fuel cost, even though electricity output only contributes 22 percent.
Sudarto said that the company also continues the efficiency of operations by reducing the consumption of fuel oil for the PLN power plant and replacing it with biofuel, as well as increasing electricity supply from other plants with lower operating costs. The efficiency of operations is carried out considering that until now the government has persisted in not raising electricity tariffs.
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