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Friday, 04 September 20
IN A DEEPENING DEBT HOLE OF $34 BILLION, INDONESIA’S PLN MUST STOP DIGGING - IEEFA
 The utility has added IDR100 trillion in debt annually for the last five years
Utilities globally started changing the way they do business years ago, but Indonesia’s PLN power company stands out as a laggard, focused on a confused menu of piecemeal generation options rather than holistic planning that provides system-level solutions, finds a new report from IEEFA, the Institute for Energy Economics and Financial Analysis.
PLN, alongside utilities worldwide, has suffered a severe drop in revenue as power consumption fell by as much as 20% in some cases amid the COVID-19 pandemic, writes Elrika Hamdi, author of the report Never Waste a Crisis – Indonesia’s PLN Needs A Coherent Strategy to Ride Out the COVID-19 Pandemic.
“But the roots of PLN’s problems are deeper than just the pandemic: PLN’s quiet crisis reflects dysfunctional planning and governance that have put the company into strategic paralysis, unable to change direction or adapt to new market realities,” says Hamdi.
“Despite all the warning signs, senior managers still run the power sector with an old-fashioned business-as-usual mindset. Unfortunately, a 2010 playbook will not save PLN from falling deeper into a modern-day debt trap. Neither will indulging an extractive economy mindset that fosters dependence on fossil fuel, just because it’s there”.
“There has to be a willingness to ask the hard questions when PLN’s ocean of red ink proclaims that PLN’s resource-driven development plans are obsolete in a high-technology world.”
The report notes that much of PLN’s current predicament stems from a plan to add a massive 35 gigawatts of generation capacity to Indonesia’s power supply that was poorly designed and implemented.
“The 35 GW program is a political promise that was meant to embody President Joko Widodo’s (Jokowi’s) ambition to fully electrify Indonesia. There is nothing wrong with the ambition, but the subsequent planning and execution has lacked accountability,” says Hamdi.
“Adding generation capacity has become a goal with little attention paid to long-term financial impacts or new system design options. In the absence of much-needed checks and balances, PLN has been driven to the brink and taxpayers will be left to pay the price.”
“PLN’s ability to sustain debt at this level rests firmly on Indonesia’s investment-grade sovereign credit rating and the government’s readiness to support PLN debtors in the event of financial distress,” says Hamdi, noting that PLN bonds are still relatively attractive to investors because of the company’s monopoly and its quasi-sovereign status.
The author also questions the accountability of government support for PLN. Noting both direct and indirect supports, including subsidies, compensation, capital injections, special accounting treatments and government guarantees, Hamdi says there appears to be little consistent oversight of how government support is used to dress up PLN’s accounting.
“The Ministry of Finance, considering PLN’s strategic importance, makes PLN a top priority, but that does not mean PLN’s financial problems can be effectively addressed by endless access to cheap debt that could eventually threaten Indonesia’s financial credibility,” she concludes.
“The best strategy for PLN would be to rebase their planning framework to focus on more cost-effective grid investments that improve the long-run efficiency of the whole power system. Private sector players cannot invest in the grid and have therefore crowded into the generation sector. This has accentuated PLN’s narrow focus on baseload generation has resulted in excess capacity and a brittle system that lacks flexibility. What’s needed now is a more grid-centric strategy that would permit PLN’s investment to enable a more efficient system. It is crucial for PLN to make sure that the power sector reform is not just cosmetic.”
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) conducts global research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable, and profitable energy economy.
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Saturday, 29 August 20
COAL INDIA'S FUEL SUPPLY TO POWER SECTOR DROPS ABOUT 20% IN APR-JUL: PTI
State-owned Coal India”s fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-Jul ...
Saturday, 29 August 20
SOUTH KOREAN BROKERAGE FIRM KOREA INVESTMENT & SECURITIES TO STOP ALL COAL BUSINESS - KOREA HERALD
South Korean brokerage firm Korea Investment & Securities has decided to stop its investments in coal, in line with the Moon Jae-in administrat ...
Thursday, 27 August 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 985,000 TONS OF BITUMINOUS COAL FOR NOVEMBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 985,000 ...
Thursday, 27 August 20
SOUTHEAST ASIAN NATIONS SET REGION-WIDE RENEWABLE ENERGY GOAL OF 23 PERCENT BY 2025 - ASEAN POST
The Association of Southeast Asian Nations (ASEAN) has set an ambitious target of securing 23 percent of its primary energy from renewable so ...
Thursday, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
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- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Planning Commission, India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- The University of Queensland
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
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