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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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Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
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- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Australian Coal Association
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Planning Commission, India
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
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