Jakarta – Finance Sri Mulyani has sent a letter to Energy and Mineral Resources Minister Ignasius Jonan to inform him about the financial risk if the government goes ahead with its plan to construct 35,000 megawatts power plants by 2019.
In her letter dated Sept. 19, Sri Mulyani said the government needed to make an adjustment, considering the financial condition of state-owned electricity company PLN to finance the planned projects.
She said PLN was financially weak because it had to pay its debts causing it to have limited funds to invest in a government program. It forces PLN to rely on loans from third parties, said the minister.
Meanwhile, electricity sales also missed the target. "This was also caused by the government policy not to increase the electricity tariff," said Sri Mulyani in her letter, according to kontan.co.id on Wednesday.
She called on the Jonan and State-Owned Enterprises Minister Rini Soemarno to be more efficient – especially when using primary energy like coal – and to anticipate PLN's failure to fulfill its financial obligations in the future.
Meanwhile, Energy and Mineral Resources Ministry spokesperson Kusdiana said that PLN had controlled their spending based on the existing parameters: electricity sales growth, sales volume and renewable energy. "The target of primary energy use for electricity is 4.66 percent," the official added.
PLN spokesman I Made Suprateka said LPN projects are always a financial risk. "They have not produced electricity, but we still have to pay them." (bbn)