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