http://jakartaglobe.id/business/state-utility-company-pln-denies-financial-problems/
*State-Run Utility Company PLN Denies Having Financial Problems * *Jakarta.* State-run utility company Perusahaan Listrik Negara, or PLN, denied having financial problems following a leaked letter <http://jakartaglobe.id/business/leaked-letter-reveals-finance-ministers-worries-state-power-company-plns-debts/> sent by Finance Minister Sri Mulyani Indrawati. "All of PLN's debts are paid on time and none have missed its due," Sarwono, PLN's finance director, said in a statement late on Wednesday (27/09). "I think it was just a reminder, we considered it as a normal thing," he said. According to Sarwono, PLN's debts have reached Rp 58 trillion ($4.3 billion) over the past three years but the company received Rp 145 trillion during the same period, indicating that the company has enough funds to cover its debts. Sarwono said PLN has planned and projected its debt payment for the next 30 years, keeping track on each debt's due date and interest rate. The company also has a rescue protocol if the company is short on liquidity. "So the fear of default does not exist," he said. The Energy and Mineral Resources Minister Ignasius Jonan and PLN president director Sofyan Basir also shared the same opinion. "If the PLN's financial state is coming toward a yellow light, then I think the minister of state-owned enterprises and I would report it to the president and the finance minister," Ignasius said. "The condition is safe, under control." Sri Mulyani reportedly sent an official letter to Ignasius and State-Owned Enterprises Minister Rini Soemarno on Sept. 19 to give warning on PLN's ailing financial performance over the past three years. The letter emphasized the importance of increasing electricity tariffs and cutting production costs to keep the company afloat. Xxxxxxxxxx http://jakartaglobe.id/business/leaked-letter-reveals-finance-ministers-worries-state-power-company-plns-debts/ *Leaked Letter Reveals Finance Minister's Worries Over State Power Company PLN's Debts * *Jakarta.* Finance Minister Sri Mulyani Indrawati has reportedly sent an official letter labeled "urgent" to Energy and Mineral Resources Minister Ignasius Jonan and State-Owned Enterprises Minister Rini Soemarno, outlining state power company PLN's ailing financial performance in the past three years and its toll on the state budget. The letter, dated Sept. 19, was leaked by an unnamed source on Wednesday (27/09), according to local news outlet Detik.com. In a copy of the letter received by the Jakarta Globe, Finance Minister Sri Mulyani emphasized the importance of increasing electricity tariff and cutting production cost to keep the company afloat. Sri Mulyani also pointed out in her letter that her ministry has to apply for a waiver to PLN's lenders to prevent a cross-default of the company's government-backed loans in the past three years. Cross-default is a provision in a loan agreement that will put a borrower, in this case PLN, in default if it defaults on another obligation, creating a domino effect on all of its loans. "PLN's limited internal fund to pay for the tasks assigned by the government is forcing it to rely on loans from banks, bond issuance and international financial services," the minister said in the letter. Sri Mulyani also said PLN will keep missing its debt payment as the state company continues to fail to reach its sales target. "The government's decision to scrap the plan for an electricity tariff hike will make PLN more likely to fail to pay back its debts," she said. The Energy and Mineral Resources Ministry and PLN have refused to comment on the leaked letter. PLN's senior manager of public relations, Agung Murdifi, told the Jakarta Globe the company will release a statement soon. The Finance Ministry's communication bureau released a statement on Wednesday saying it "regrets" that the letter has been leaked but that the ministry has "an obligation to manage the state budget in a careful and prudent manner" which includes conducting supervisions and risk assessments. "Infrastructure development is a national priority program that is crucial to efforts to eradicate poverty, reduce inequality and support inclusive economic growth," Nufransa Sakti, the Finance Ministry's communication bureau head, said. President Joko Widodo has pushed for ambitious infrastructure projects since the beginning of his tenure, including a 35,000-megawatt power grid expansion across the archipelago. The government is targeting a 100 percent electrification ratio — the percentage of Indonesian households connected to the country's electricity grid — by 2020. PLN said electrification ratio in Indonesia is at 92.8 percent so far, compared to 90.35 percent last year and 88.3 percent in 2015
