indonesia’s 35 gw program: investment opportunities, … · 2016. 3. 3. · pln’s balance sheet...
TRANSCRIPT
BUKU STATISTIK Dr. Agung Wicaksono, Vice Chairman of PMO for 35 GW – Ministry of Energy & Mineral Resources IAEE Asian Conference - Perth, 16 February 2016
INDONESIA’S 35 GW PROGRAM: INVESTMENT OPPORTUNITIES, FINANCING NEEDS AND CHALLENGES
ELECTRIFYING THE WHOLE INDONESIA SO FAR? 2
• Electrification ratio in 2014 is 84.35%. • Electrification ratio target in 2019: 97.35%
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Kal$mra467MW0,9%
Aceh-Sumut1788MW
-9%Sulu;enggo520MW-6,8%
Bangka130MW-10,8%
Sumbar-Riau
1194MW-2,7%
Sumbagsel1493MW-4,1%
Kalbar406MW-8,4% Kalselteng
543MW-0,2%
Papua205MW5,8%
Maluku140MW-3,8%
Sulselbar1024MW21,6%
NTT141MW9,9%
Jawa-Bali23900MW
31%
Government must take corrective measures required in energy crisis and emergency (Law on Energy No. 30/2007, Article 6 (3))
31,951 MW power system 24,924 MW sufficient 813 MW deficit 6,214 MW crisis! (8 systems)
POWER DEFICIT ACROSS NATION: CRISIS IS LOOMING
35 GW PROGRAM FOR INDONESIA – 72.9 BILLION $ INVESTMENT
PT PLN (Persero)
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MW: Megawatt kms: Kilometer-circuit
MVA: Mega-volt ampere Legend:
Total Indonesia Mio USD
42,940 MW 291 Powerplant 53,663
46,597 kms 732 Transmission 10,893 108,789
MVA 1.375 Substation 8,386
Total 72,942*
Jawa-Bali Mio USD
23,863 MW 49 Powerplant 28,955
11,185 kms 349 Transmission 4,615
66,083 MVA 672 Substation 5,114
Sumatera Mio USD
11,327 MW 76 Powerplant 14,282
19,305 kms 210 Transmission 3840
32,406 MVA 398 Substation 2475
Kalimantan Mio USD
2,852 MW 40 Powerplant 4000
7,883 kms 68 Transmission 1122
3,910 MVA 115 Substation 324
Sulawesi & Nusa Tenggara
Mio USD
4,159 MW 83 Powerplant 5434
7,207 kms 90 Transmission 1169
5,620 MVA 165 Substation 412
Maluku & Papua Mio USD
739 MW 43 Powerplant 992
1,017 kms 15 Transmission 148
770 MVA 25 Substation 61 *not incl. land acquisition, interest during construction (IDC) and taxes
ECONOMIC SCALE OF 35,000 MW PROGRAM
PT PLN (Persero)
5
732transmissionlines(75,000settower)
1,375unitSubsta9ons
301,300kmaluminiumconductor2,600settrafo
3.5milliontonssteel
291powerplants
EmploymentDIrect:650,000Indirect:3million
LocalIndustry~40%frominvestment(~29.2BillionUSD)
Investment : 72.9 Billion USD**
*Es9mate**excl.land,InterestDuringConstruc9on(IDC)andtaxes
6 PROGRESS TO DATE: 17.3 GW OUT OF 35 GW CONTRACTED
PLN’s EPC:
2883 MW
IPP: 14453 MW
Total by end 2015: 17336 MW
source: PLN’s report
No Country of Origin Capacity (MW)
Percentage
1 China 8008 46% 2 Japan 5195 30% 3 Korea 1490 9% 4 Malaysia 1390 8% 5 Indonesia 1078 6% 6 Turkey 120 1% 7 USA 120 1%
TOTAL 17331 100%
INVESTORS VARIED, THOUGH TWO COUNTRIES DOMINATE 7
source: PLN’s report
Under Procurement
8368 MW (19 projects)
New Procurement
7165 MW (18 projects)
2016 total: 15533 MW (37 projects)
TARGET PENANDATANGAN PPA S.D JUNI 2016 15.533 MW; 37 PROYEK
8 THE REMAINING TO BE PROCURED THIS YEAR
source: PLN’s report
A TOTAL OF ALMOST 100 BILLION US$* REQUIRED 9
(Figures in million US$) Total Financing Needs
Power plant US$ 53,663
Transmission US$ 10,893
Substation US$ 8,386
Distribution US$ 7,355
IDC US$ 5,319
Land US$ 7,291
Total US$ 92,907
IPP’s Financing Needs Power plant US$ 37,454
Transmission US$ 680
Substation US$ 249
Land US$ 4,055
Total US$ 42,438
PLN’s Financing Needs Power plant US$ 16,209
Transmission US$ 10,213
Substation US$ 8,137
Distribution US$ 7,355
IDC US$ 5,319
Land US$ 3,236
Total US$ 50,469
Spent US$ 6.654
Will be spent US$ 43.815
* incl. IDC and land
FINANCING STRATEGY USING MULTIPLE SOURCE FOR MULTIPLE USE 10
Export credit agency scheme and bilateral loans from Asian countries willing to finance
Multilateral loans available for gas and renewables power plant
Coal-fired power plants
Renewables and gas power plants
Transmission Multilateral and bilateral loans based on result-based lending (RBL) scheme
Substation, distribution and land Acquisition
Bond and syndicated loans to finance substation and land acquisition, while RBL scheme can be potentially used for distribution.
*) Source: EY analysis
FINANCING CHALLENGE: DEBT COVENANT OF PLN 11
Covenant Limit 2014
Debt Service Coverage Ratio (DSCR)
Min. 1.5x 1.35
Consolidated Interest Coverage Ratio (CICR)
Min. 2.0x 3.49
Interest Bearing Debt-to-Equity (DER)
Max. 3.0x 2.02
PLN’s ratio of interest-bearing-debt to equity is higher than similar companies such as Kepco (Korea), TNB (Malaysia), and EGAT (Thailand). Its capital structure dominated by debt is very sensitive to interest rate fluctuation.
A 55% B
18%
C 27%
PLN Capital Structure per 31 December 2014
Debt Covenant PLN
PLN would require equity injection to maintain healthy capital structure
D/E ratio of PLN is higher than its peers
PLN’s DSCR covenant was breached in 2014
Rising interest rate has caused interest debt to also rise, surpassing the minimum limit of DSCR. This has the potential for default and cross-default, which could lead to further cost in the future.
A Interest Bearing Debt
B Non Interest-Bearing Debt
C Ekuitas
* EY Analysis, based on audited financial report 2013 for EGAT and 2014 for others
IPP’s debt consolidated in PLN’s balance sheet
Asset and liabilities of IPP are consolidated to PLN’s balance sheet, further weakening its debt covenant positions.
0.59 0.67 1.18
2.02
0 0.5
1 1.5
2 2.5
Tenaga Nasional Berhad
EGAT Kepco PLN
Interest Bearing Debt-to-Equity Ratio
FY 2013/2014*
NOT ONLY FINANCIAL, BUT ALSO NON-TECHNICAL CHALLENGES ARE COMPLEX
No Challenges Solution Progress 1. Land Acquisition Applying Law No 2/2012
2. Tariff Negotiation Setting up ceiling tariff for IPP and Excess Power (Minister’s Decree No. 3/2015)
3. Selection and Appointment of IPP
Acceleration by direct appointment and direct selection for Mine Mouth, Marginal Gas, Expansion, and Excess Power (Minister’s Decree No. 3/2015)
4. Permit Issuance One Stop Service (PTSP) at BKPM
5. Performance of Contractor and Developer
Due Dilligence by Independent Procurement Agent (Minister’s Decree No. 3/2015)
6. Project Management Capacity
Establishment of PMO (Project Management Office), both at GOI and PLN
7. Cross-Sectoral Coordination
KPPIP led by Coordinating Minister for Economy
8. Legal Issues Issuance of Presidential Decree No. 4 / 2016
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CHANGE IN ENERGY MIX REQUIRED IN FUTURE PLANNING
35,000 MW
PLN: 10,233 MW 25,305 MW
5,000 MW IPP: 30,000 MW
IPP
from
to……..
Gas 32%
Coal 63%
NRE 5%
RUPTL 2014-2019
from……..
Energy Mix Target 2025
Gas 25%
Coal 50%
NRE 25%
Energy Mix Target for Electricity (GR No. 79/2014)
to……..
Kapasitaslitbang,industri&infrastrukturbelumop$mal
AS THE NEXT STEPS, 35 GW SHOULD CALL FOR…… 14
1. more IPP participation than PLN
2. more renewables & gas, with a revised plan underway
3. support on government’s capex & special accounting treatment
