JAKARTA (TheInsiderStories) – Indonesia state-owned utility company PT Perusahaan Listrik Negara (PLN) has put in motion a plan to issue a Global IDR Bond or Rupiah-denominated bond to be sold in foreign markets.
Sofyan Basir, CEO of PLN, disclosed that the bond issue will amount to approximately US$1 billion to US$2 billion, issued in the second quarter this year (Q2), adding they will no longer use ‘Komodo Bond’ because it has been used by PT Jasa Marga (Persero) Tbk last year.
The company needs at least US$5 billion this year to finance its operational and investment portfolio. PLN is estimated to have assets of Rp1,300 trillion.
‘We considered the name ‘Nasi Goreng’ or ‘Electric Bond; we expect to issue before June,’ he said, Monday (08/01).
Basir expects the company to suffer losses due to the burdens of raising coal prices, ICP last year, while the company was not allowed to re-adjust the electricity tariff, as government enforced a mandatory subsidy program.
The government of Indonesia aims to build more coal-fired power plants, in order to increase the electrification rate and reduce the consumption of expensive diesel (used in power plants). PLN has been tasked by the government to supply an additional 55,500 MW of power nationwide by 2019, increasing the electrification ratio to 90 per cent by 2020.
Last year, PLN was heavily criticized for inefficiency and accumulating debts totaling US$22 billion; these debts raised concerns on the part of Minister of Finance Sri Mulyani about company debts and interest payable over the next 30 years exceeding (SOE) cash-raising capability of the state-owned enterprise.
Many stakeholders warned that over the long run PLN may suffer cash flow problems because of the mandatory 35,000 MW mega power plant. PLN will need around US$10 billion at least for the construction of the 10,000 MW plants and for transmission.
Even so, Basir claimed PLN’S debts were still manageable. Around Rp100 trillion of debt was owed to local creditors, US$1.1 billion to the World Bank and Asian Development Bank (ADB) and the remainder of around Rp186 billion to various foreign creditors.
Written by Elisa Valenta, email: email@example.com