Jakarta, 10 February 2020 - Indonesia Infrastructure Guarantee Fund (IIGF) as one of the Special Mission Vehicles (SMV) under the Indonesian Ministry of Finance, consistently supports the acceleration of infrastructure development through its mandate to provide government guarantees for infrastructure development in various sectors including the national electricity sector.

On Wednesday (10/2) a Government Guarantee Agreement was signed through the Ministry of Finance and IIGF on Direct Lending from the Asian Infrastructure Investment Bank (AIIB) to PT Perusahaan Listrik Negara (Persero) / PT PLN for financing Network development projects. Distribution of East Java and Bali.

The electricity system for the East Java and Bali regions is a system that is interconnected with the Java-Bali system to serve electricity needs in East Java, Madura and Bali. Based on 2019 data, the number of customers in East Java and Bali is around 13.48 million customers with a connected power capacity of around 24.39 GVA and a power consumption of around 42.94 TWh. The development of this distribution system is needed to accommodate sales growth, additional customers, as well as improvement and increase in the efficiency of the distribution system reliability. This is done by constructing a Medium Voltage Network (JTM), a Low Voltage Network (JTR), transformers, and customer connections. In addition, the Project is also expected to encourage the achievement of the national electrification ratio target of 100% by 2021.

The government, in this case the Ministry of Finance, has provided support in the form of a Government Guarantee from the Ministry of Finance and IIGF, which enables AIIB as a multilateral / development financing institution, providing direct loan financing to PT PLN with terms and conditions that are very beneficial to PT PLN because it is equivalent to financing for government (sovereign loan) so that PT PLN can develop these projects with more affordable financing costs and more efficient investment value so that they can reach more people in the East Java and Bali regions. This accelerates the Government's efforts to increase the National Electrification ratio, especially in underdeveloped, frontier, and outermost (3T) areas with a strategy of increasing access to electricity through expanding the electricity network and playing a role in supporting government efforts to attract private sector investment in this sector.

Director General of Finance and Risk Management of the Ministry of Finance, Luky Alfirman, stated at the event that the Government through the Ministry of Finance and SMV of the Ministry of Finance of PT PII remains consistent in continuing to accelerate infrastructure development, including the PT PLN Distribution Network project.

"By providing support through government guarantees for this project, the Ministry of Finance together with IIGF have supported PT PLN in increasing the national electrification ratio which will later be enjoyed by people in the East Java and Bali regions. Support from multilateral financing institutions such as AIIB shows the trust and support of international stakeholders to the Government of Indonesia in developing infrastructure that has a broad impact on the Indonesian economy and society, "said Luky.

The President Director of PT PII, M. Wahid Sutopo explained that by providing government guarantees for this project, IIGF, together with the Ministry of Finance, are committed to supporting the development of the main electricity infrastructure in the East Java and Bali regions. The role of IIGF in the Government Guarantee scheme is expected to support an increase in the electrification ratio in East Java and increase the growth of additional subscribers and increase network efficiency.

"This East Java and Bali Distribution Network Project is a project of PT PLN, which is a joint project of the Government of Indonesia from the Ministry of Finance and IIGF. The projects that were previously guaranteed were the Hydropower Plant development project in the Eastern Indonesia region carried out by PT PLN with financial support from KfW, namely the Hydropower Program on September 5, 2019 and 2 electricity distribution network development projects, namely the Kalimantan and Maluku-Papua regions. with funding from ADB and the Sulawesi and Nusa Tenggara Region with funding from KfW.
"The hard work that was generated from the start until the signing of this project was not only the hard work of PT PLN, but also from the agencies involved, namely the Ministry of Finance, PT PII, AIIB. We hope this project can run well and smoothly so that it can contribute to increasing the need for national electrification ratios for people in the East Java and Bali regions, ”explained the Finance Director of PT PLN, Sinthya Roesly at the event.

For information, PT PLN has received funding in the form of a direct loan from AIIB for the Distribution Network Development Project in East Java and Bali. This project has received funding in the form of a direct loan from AIIB to PT PLN worth USD310 million. The scope of this funding is for the development of distribution network access in the East Java and Bali regions and to increase the reliability of the existing distribution system.

Back