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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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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Tamil Nadu electricity Board
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