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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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Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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Showing 26 to 30 news of total 6871 |
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- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
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