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