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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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Wednesday, 16 December 20
CHINA TO BOOST DOMESTIC SUPPLY - FITCH
China’s benchmark Qinhuangdao 5,500kcal/kg coal price rose above the government’s upper yellow interval of CNY600/tonne in early Octobe ...
Wednesday, 16 December 20
INDONESIAN COAL RECOVERING - FITCH
Commenting on Indonesian coal, Fitch Ratings, the Indonesian 4,200 kcal index has begun to recover, improving to over USD 29 in November compared t ...
Tuesday, 15 December 20
NEWCASTLE PRICES RECOVER - FITCH
Prices for the benchmark Newcastle 6,000 kcal/kg grade coal have rebounded to over USD 70/tonne since late November as major Asian economies ease l ...
Tuesday, 15 December 20
APAC COAL PRICES REBOUND ON IMPROVED DEMAND AND SUPPLY CUTS - FITCH RATINGS
Prices for the benchmark Newcastle 6,000kcal/kg grade coal have rebounded to over USD70/tonne since late November as major Asian economies ease loc ...
Tuesday, 15 December 20
CHINA EXTENDS FULL OPEN GESTURE TO IMPORTED COAL EXCEPT FOR AUSTRALIA - GLOBAL TIMES
Domestic, overseas suppliers will take up share with easier clearance
China's top economic planner on Saturday gave approval to ...
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Showing 706 to 710 news of total 6871 |
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- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- The University of Queensland
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- White Energy Company Limited
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
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