Key Loans 380 Million US Dollars From IBRD, One Step Again PLN Receives 610 Million US Dollars To Build Upper Cisokan Hydroelectric Power Plant
JAKARTA - The plan of PT PLN (Persero) to seek funding to support the construction of the Upper Cisokan Hydroelectric Power Plant (PLTA), has begun to be realized. PLN has just received funding of US$380 million from the International Bank for Reconstruction and Development (IBRD), which is part of the World Bank Group.
For this funding, PLN gets a very competitive interest rate with a fairly long tenor of 24.5 years.
Director General of Treasury of the Ministry of Finance Hadiyanto said this loan extension scheme was the first for PLN in the last six years. The last time PLN signed an SLA was in 2016.
PLN targets to raise US$610 million for the Upper Cisokan hydropower project. Therefore, this project is also planned to be funded by the Asian Infrastructure Investment Bank (AIIB) with a total funding of US$230 million in the form of co-financing with the World Bank with a similar scheme.
"We really support this financing because the goal is to finance the construction of the Upper Cisokan hydropower infrastructure based on new and renewable energy (EBT) from hydropower, which is more sustainable, affordable, and of course sufficient to provide electricity for the community later," Hadiyanto said, in his statement quoted on Tuesday. March 15.
On the other hand, the Deputy for Finance and Risk Management of the Ministry of SOEs, Nawal Nely, assessed that in a global and national context, the construction of the Upper Cisokan hydropower plant is a timely and critical step by PLN in the energy transition process.
In his view, this project directly answers the mandate of the Sustainable Development Goals (SDGs) related to equitable access to electricity, efficient use of energy, as well as increasing the proportion of NRE in PLN's primary energy portfolio in the long term.
In addition, this hydropower plant will reduce the dependence and sensitivity of the state budget to fluctuations in the prices of major commodities, especially oil and gas. Thus, the cost correlation coefficient with oil and gas price movements can be reduced. "Thirdly, this is the only project that matches the loan duration and project life expectancy, so that the risk of re-financing, apart from having manageable interest rates, can also be handled," he said. Nely.
President Director of PLN, Darmawan Prasodjo, said that the competitive financing support is also proof that PLN has gained international trust.
“The international community has confidence in the Indonesian government and PLN in their efforts to build electricity infrastructure through renewable and low carbon emission plants. This is a real step for PLN, which is supported by the presence of the Indonesian government in the energy transition process towards net zero emissions with the supply of renewable energy with a large scale and capacity," he said.
The construction of the hydropower plant with a capacity of more than 1,000 MW shows one of PLN's commitments in the context of energy transition through the development of new and renewable energy as stated in the Electricity Supply Business Plan (RUPTL) 2021-2030.
This project is targeted to operate in 2025 and supply electricity needs in the Java-Bali system.
"This project that uses pumped storage technology will produce efficient, low-carbon energy, and can be the main enabler in the energy transition process and the inclusion of intermittent EBT plants in a large portfolio in the Java-Bali system," said Darmawan.
"The construction of the Upper Cisokan hydropower plant is a form of PLN's support for the Indonesian government to realize a low-carbon economy and achieve the target of the renewable energy mix in Indonesia towards Net Zero Emission 2060," he said.
Darmawan added, this project also supports one of the pillars of the G20 in 2022. That is sustainable and inclusive growth with sustainable energy transition being a priority issue.
As additional information, this hydropower plant has a total capacity of 1,040 megawatts (MW) and is located on the border of Bandung and Cianjur regencies, West Java.