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