JAKARTA (TheInsiderStories) – Power producer, PT Perusahaan Listrik Negara (PLN), said that there will be an additional 3,000 mega watt (MW) of power plants are ready to operate this year in Java and near city. Currently, the installed capacity of power plants around the island, Madura, Bali has reached 40,000 MW.
The additional capacity of 2,000 MW came from the Java-7 Steam Power Plant, Tanjung Jati, and several mini power plants built by the state-owned company. The regional business director for Java, Madura and Bali, Haryanto W.S, said on Tuesday (02/23), the number of customers in these areas equal to 70 percent of total users in Indonesia.
With the new capacity, PLN targets the revenues could reached Rp391.6 trillion (US$27.77 billion) in 2021 after last year, the state-owned firm financial performance has been hit by the pandemic.
The CEO, Zulkifli Zaini, revealed to achieve the targets, the company will make various efforts like increasing sales of electricity, maintain adequate electricity supply, and provide competitive rates for industrial customers. The Company will also strive to enforce the Domestic Market Obligation of coal and gas in order to ensure certainty of costs and supply of primary energy.
Recently, Moody’s Investors Service has assigned a Baa2 rating to the proposed senior unsecured medium term notes (MTN) to be issued by state-owned power producer, PLN. The outlook on the rating is stable. The notes will be issued under its existing $15 billion senior unsecured MTN program, which is rated (P)Baa2.
The company plans to use the proceeds to partially fund its capital expenditure requirements and for general corporate purposes. The agency said, PLN’ Ba3 reflects the producer’ position as Indonesia’s only vertically integrated electric utility, including its dominant position in the generation, transmission and distribution businesses.
At the same time, the producer faces weakening fundamentals, principally driven by a sharp decline in electricity demand over recent months, as well as a continued shortfall in receipts from the government, and is increasingly dependent on government subsidies.
Its also reflects PLN‘ high financial leverage, which has been further elevated by its involvement in the national capacity additions programs, Fast Track programs 1 and 2, and the 35 gigawatt program. These programs are expected to increase the state run firm debt levels and further pressure its key credit metrics over the medium-to-long term until the programs are completed.
The four-notch rating uplift reflects Moody’s expectation of a very high likelihood of government support in times of need. This expectation of support takes into account the government’ 100 percent ownership of PLN and the company’ strategically important role in Indonesia’s critical power sector.
In addition, the stable outlook reflects the stable outlook on Indonesia’ sovereign rating and PLN‘ strategically important position as Indonesia’s only vertically integrated electric utility, as well as its strong government ties.
The firm is the dominant Indonesian operator of generation plants, and transmission and distribution networks. Its transmission network covered around 58,959 circuit kilometers and its distribution network covered around 979,855 circuti kilometers as of end 2019.
Perusahaan Listrik Negara is the country’ largest electricity producer, with a capacity of around 45.7 gigawatt, which accounted for 72.5 percent of the market as of December 2019. It is the sole off taker for Indonesia’ independent power producers.
Recently, the government has reduced the number of new power plant capacity to 15.5 giga watts (GW) in the 2021 – 2030 Electricity Supply Business Plan due to the virus outbreak. According to director general at the energy and mineral resources ministry, Rida Mulyana, the country also reduced the new renewable energy-based power plant targets to 500 MW.
He estimated in the next 10 years, the electricity growth will only 4.9 percent per year, below the initial projection an average 6.4 percent.
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