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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, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their ec ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
Tuesday, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
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- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
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