PLN to Issue $2 Billion Komodo Bonds in 2018


JANUARY 08, 2018

Jakarta. State utility company Perusahaan Listrik Indonesia, or PLN, is preparing to issue rupiah-denominated global bonds to raise $2 billion for financing the country's power development, its president director said on Monday (08/01).

The bonds, also known as "komodo bonds," will be offered for the second time, after last month's issuance by state-owned toll road operator Jasa Marga, which raised Rp 4 trillion ($280 million).

The government has been pushing state-controlled companies to seek alternative financing for national infrastructure projects amid public funding constraints and limited financing from local banks.

"There is a fear of limitations at national banks. Although we have a loan ceiling, we want to see how foreign investors perceive the rupiah," PLN president director Sofyan Basir told reporters in Jakarta.

Jasa Marga's komodo bonds offering at the London Stock Exchange was oversubscribed 15 times, as investors were attracted by high yields and compared the bonds to similar dollar-denominated ones.

"We hope it will be before June, in the first half of this year," Sofyan said.

PLN, which has a monopoly on distributing power in the country of 260 million people, will use the issuance proceeds to support the government's 35,000 megawatt power development plan and to pay debts.

The electrification project requires about $140 billion, while the company's debts have been estimated at $4.32 billion.

The government wants all Indonesian households to be connected to the national grid by 2020.

According to PLN data, last year 92.8 percent of Indonesians had access to electricity. In 2016, it was 90.35 percent and 88.3 percent in 2015.