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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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Monday, 14 December 20
PHILIPPINE BANK RCBC TO STOP LENDING FOR NEW COAL-FIRED POWER PROJECTS - MANILA BULLETIN
Yuchengco-led Rizal Commercial Banking Corporation (RCBC) has forthrightly declared that it will no longer extend financing to new coal-fired power ...
Sunday, 13 December 20
LONGSTANDING DOWNSIDE RISKS TO TRADE OUTLOOK - BALTIC EXCHANGE
The OECD has attempted to put a positive spin on the trade message emanating from its latest economic outlook, released last week.
The ...
Sunday, 13 December 20
INDONESIA COAL OUTPUT AT 514 MILLION TONNES THIS YEAR, 2021 TARGET UNCHANGED - REUTERS
Indonesia coal output in the period to Dec. 10 stood at 514.2 million tonnes, official data from the energy ministry’s website showed.
&n ...
Thursday, 10 December 20
MALAYSIA'S CIMB ANNOUNCES COAL FINANCING PHASE-OUT BY 2040 AS ASIA'S FOSSIL FUEL DIVESTMENT DRIVE ACCELERATES - IEEFA
The first emerging markets bank to announce a progressive coal exit policy
Malaysia’s CIMB Group Holdings (CIMB) has announced ...
Wednesday, 09 December 20
MARKET INSIGHT - INTERMODAL
Heading towards the end of a difficult year and with the entire planet under the shadow of the covid-19 virus, it is interesting to proceed with a ...
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Showing 711 to 715 news of total 6871 |
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- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- ASAPP Information Group - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- White Energy Company Limited
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Economic Council, Georgia
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
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