JAKARTA (TheInsiderStories) - Indonesia state-owned electricity producer PT Perusahaan Listrik Negara (PLN) get ten years’s loan facility from PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Bank Mandiri Tbk (IDX: BMRI) and PT Bank Tabungan Negara Tbk (IDX: BBTN) up to Rp32 trillion (US$2.44 billion) to support the 35,000 megawatt’s electricity program.
Previously the three state owned banks provided syndicated loan worth Rp 27 trillion and treasury line of $950 million to support the government’s ambitious power plant program.
Minister for SOEs Rini Soemarno said the three state-owned banks to channel investment and working capital loans during 2016 to 2017. CEO of PLN Sofyan Basyir adding, the funds will use to lift up the equity of the company, to build transmission and develop mini power plant in border areas.
PLN, He said, need Rp 170 trillion do build the transmission across Indonesia in five years time. Beside from bank loans, the power producer will seeks funding from bond issuances and multilateral loans.
Finance Director PLN Sarwono Sudarto continued, the company plan to issue global bonds up to $2 billion at the end of 2016 or early 2017.
“PLN should pursue the development of electricity infrastructure in order to cover the electricity needs in 2019, “said Sofyan at the signing ceremony on Sept, 9.
In a move to speed up the development of its massive power plant development program, President Joko Widodo has issued sets of regulations to give legal protection to policymakers responsible for the construction of power plants in Indonesia.
The regulations would also address issues such as business permits and land procurement processes, while at the same time giving a mandate to regional governments to support the projects. Over the past years, power plant project developments have been slow due to land clearing-related issues.
The presidential decree complements regulations issued by the Energy and Mineral Resources Ministry in January 2015 that allows direct appointments of investors with established track records in constructing power plants.
According to government data, trom the total 212 new power plants project, at least 19 percent had entered the construction phase and at least 100 had completed their land procurement process.
Indonesia needs to increase its electricity capacity by at least 7,000 MW a year to meet annual demand for electricity of 7-8 percent per annum. For 35,000 MW projects, at least 10,000 MW on the first phase of construction will be supervised by state-owned electricity company PT Perusahaan Listrik Negara (PLN).
Total investment in the power plants and their supporting electricity infrastructure is estimated at Rp 200 trillion (US$15.04 billion), to be shared between PLN and independent power producers (IPPs).