PLN sees Sri Mulyani’s letter as standard warning

STATE BUDGET - PLN president director Sofyan Basir has said a letter from Finance Minister Sri Mulyani to Energy and Mineral Resources Minister Ignasius Jonan about the financial condition of PLN serves as a warning from the minister to his company.

He said every year Sri Mulyani warned PLN to carefully control its debt service coverage ratio (DSCR).

“It is common. But it’s usually mentioned verbally,” Sofyan said as quoted by kontan.co.id, adding that PLN’s DSCR was 1.5 percent because lending institutions like the World Bank and the Asian Development Bank (ADB) required debtors to keep their DSCRs at 1.5 percent.

In her letter dated Sept. 19, Sri Mulyani said the government needed to make adjustments to the 35,000 megawatt electricity program by 2019, considering the financial condition of PLN.

Sofyan explained that his company’s debt limit was about Rp 30 trillion (US$22.2 billion), which could be paid any time, while the total debt of the company reached Rp 300 trillion, and could be paid in the next 30 years.

“We can restructure our mature debt. PLN is bona fide. The rating is high and it is guaranteed by the government,” Sofyan said, adding that there was no problem with the financial condition of the company.

Meanwhile, PLN finance director Sarwono Sudarto said his company still had room to add debt because the company’s equity reached Rp 900 trillion. (bbn)