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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, 23 July 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 1.36 MILLION TONS OF BITUMINOUS COAL FOR OCTOBER 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 1,360,00 ...
Wednesday, 22 July 20
CIL'S COAL SUPPLY TO POWER SECTOR DROPS OVER 21% TO 93.5 MT IN APR-JUN QUARTER - PTI
The supply of coal by state-owned Coal India Ltd to the power sector fell 21.7 percent to 93.5 million tonnes (MT) in the first quarter of the ongo ...
Monday, 20 July 20
KOREA MIDLAND POWER INVITED BIDS FOR TOTAL 2.520 MILLION MT OF BITUMINOUS COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO), has issued an international tender for total 840,000 of Bituminous Coal to be used at Bo ...
Monday, 20 July 20
CHINA'S JUNE COAL OUTPUT FALLS 1.2% YEAR-ON-YEAR OVER ILLEGAL MINING CHECKS - REUTERS
China’s coal output dropped 1.2% in June on the year to 330 million tonnes, official data showed, as major coal mining areas cracked down on ...
Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
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- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
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- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
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- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
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- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- MS Steel International - UAE
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