worth a readPLN Batam Rp 24 trillion investment by...

worth a read

PLN Batam Rp 24 trillion investment by 2016

Categories: IESR in News | September 27, 2012 | Comments 0

BY Ignatius Laya & NURSEFFI DWI WAHYUNI

JAKARTA (IFT) - PT Batam National Electrical Services, a subsidiary of PT PLN (Persero), state-owned enterprises in the electricity sector, requires a fund of Rp 24 trillion for infrastructure development in Batam electricity until 2016. Dadan Koernadipoera, Director of PLN Batam, said infrastructure development was undertaken to meet the electricity consumption in Batam which grew 9% per year.

"Every year should Batam adds power to meet the needs of Batam. We are targeting a total generating capacity of 500 megawatts in Batam, from the current 300 megawatts, "said Dadan Wednesday.

He explained that the source of funding for the project came from internal cash and bank loans as well as the results of the initial public offering (IPO) scheduled for next year.

Batam PLN has appointed PT Bahana Securities as underwriters leader for IPOs PLN Batam. Having entrusted to Bahana Securities IPO, the company has also appointed IPO supporting institutions such as financial advisors (financial advisor) Ernst & Young (EY), Securities Administration Agency (BAE), PT Datindo Entrycom, and Public Accounting Firm (KAP) Deloitte.

"Target funds can be scooped from the IPO yet all I can say. How many shares will be released depending on the results of the general meeting of shareholders, "he said.

PLN Batam recorded a 8.7% increase in revenue to Rp 909 billion in the first semester of 2012. The increase was supported by electricity sales volume and selling price increases the company to the consumer.

In the first half of 2012, the company has sold as many as 806,960 megawatthour electricity to customers in the first half of 2012, up 7.3% from the same period last year. The increase was driven by the increase in one of the company's customers. In the first half year, the company had as many as 223,189 customers, while by mid-2012, its subscriber base reached 232,206.

"Currently, the electrification ratio is 100%," said Dadan.

The increase in revenue was also driven by PLN Batam electricity sale price adjustment. This year the average selling price of about USD 1143 per kilowatthour (kWh), while last year's Rp 1120 per kWh.

Dadan describes as a company that has been selling electricity rates with economic price, Electrical Services Batam adjust the selling price of electricity every three months. Tariff adjustment was adapted to a number of components such as fuel oil price movements and the inflation rate. Determination of rates must be approved by local government.

"If there is no volatility, prices can go down," said Dadan.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), judging by the price of electricity is already using economical rates, PLN Batam has a pretty good business prospects. Moreover, customers PLN Batam dominated industrial customers.

Related IPOs, Fabby suggested that the plan be re-examined. Based on the experience of some state-owned enterprises that have been listed on the Indonesia Stock Exchange, the government feared the flexibility to control the company is reduced. And PLN Batam is the only company that supplies electricity to the people of Batam.

"Experience IPO, the government lacks a majority, the implications to the selling price of electricity becomes more expensive," he said.

Compared IPO, Fabby just found Batam PLN position should be strengthened. PLN subsidiary was given the task as well as to increase the electrification ratio to the Riau Islands are currently in power deficit.

"The investment helped the government," he added.

PT Bakrie Power, a subsidiary of PT Bakrie & Brothers Tbk ( Bakrie & Brothers ), allocated U.S. $ 777 million to develop three geothermal power plant (PLTP) with a total capacity of 225 MW-250 MW. Ali Herman Ibrahim, Director of Bakrie Power, said the three plants will be built in Sokoria, East Nusa Tenggara, Dairi Prima Ngebel in North Sumatra and East Java.

"Investing for the three areas that U.S. $ 777 million, excluding our partners," he said.

Bakrie Power took Panax Geothermal Limited, a company in the geothermal sector are listed in Australia. Both will develop geothermal potential in Sokoria capacity of 30 megawatts, building a geothermal plant in North Sumatra Dairi Prima with a capacity of 30 MW-55 MW and PLTP Ngebel, East Java with a capacity of 3 × 55 megawatts.

Panax Geothermal expressed readiness to invest U.S. $ 500 million per year for the development of geothermal energy in Indonesia. Panax will begin issuing routine expenditures from 2013 to geothermal projects in Indonesia.

Exports of electricity
Meanwhile, PLN Batam is still negotiating with the Energy Market Authority (EMA) of Singapore related plans power exports to Singapore. Dadan target it met the EMA will return next week to discuss the issue.

"Currently they are seeking input from all stakeholders. Looking for anything they need, "he said.

Singapore electricity needs by 2017 is estimated at 2,000 MW and will be supplied from Johor, Malaysia and Batam. The plan, it will build a plant to supply electricity to Singapore. However, it has not been determined also the type of plant to be built.

"How much will be exported depending on the needs of Singapore, 600 megawatts or 1,000 megawatts. Singapore had already decided in 2013, "he added.

He believed electricity exports will benefit the company. The current price of electricity in Singapore around Rp 1,600 to Rp 1,700 per kWh. While the current production cost PLN Batam about USD 1020 per kWh. "So there is still margin if we sell at USD 1400-1500 per kWh," he said. (*)