PLN allocates Rp90 trillion to build electricity infrastructure this year. State electricity company PLN will set aside Rp90 trillion (US$6.3 billion) in capital expenditure (capex) in 2020 to finance the development of new electricity infrastructure, the company’s top executive has said.
PLN president director Zulkifli Zaini said in Jakarta on Tuesday that most of the funds would be used to finance the expansion of power grids and distribution networks and the construction of new power plants.
“It has been approved by the shareholders that our capex this year will be about Rp90 trillion,” Zulkifli told reporters after a meeting with Coordinating Economic Minister Airlangga Hartarto.
Build Electricity Infrastructure
According to a report submitted during a hearing with House of Representatives Commission VII overseeing energy on Feb. 5, PLN plans to build 19,069 kilometers of electricity transmission infrastructure by 2024, 4,459 kilometers of which will be built this year. As of 2019, the company has installed 60,102 kilometers of transmission network.
The company also plans to build electricity substations with a total capacity of 38,607 mega volt amps (MVA) over the next four years, adding to the existing substations with a capacity of 151,136 MVA. For this year, the company plans to build about 37 percent of the planned substations with a total capacity of 14,247 MVA in 2020.
Construction of Electricity Infrastructure
Zulkifli said that he had discussed a number of financing alternatives, such as the issuance of bonds, to raise funds for the construction of electricity infrastructure during the meeting with Airlangga.
PLN will need about Rp400 trillion to finance its investments until 2024 or Rp100 trillion every year, Zulkifli said, adding that new options for financing were needed to raise the required funds.
In January of this year PLN raised a total of Rp4.9 trillion from the issuance of conventional bonds and sukuk (sharia-compliant financial instruments) to finance its expansion.
Electricity Company in Indonesia
In addition to issuing domestic bonds, the largest electricity company in Indonesia has also issued a number of global bonds in previous years.
In May 2019, PLN issued global bonds worth up to US$2 billion as a risk refinancing measure, as reported by tempo.com.
In September of the same year, the company raised about 23.2 billion yen (US$215.5 million) through the issuance of yen-denominated bonds or the so-called “samurai bonds”.
Among PLN’s upcoming projects are the 500 kV Jawa Bali transmission to increase electricity distribution between Java and Bali, targeted to begin operation by 2023 or 2024, as well as the construction of 27,000 megawatts (MW) of power plant capacity by 2024. PLN allocates Rp 90 trillion to build electricity infrastructure this year (ydp, The Jakarta Post)
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