PLN to float Rp 1t of bonds this year

PLN to float Rp 1t of bonds this year

JAKARTA (JP): State-owned electricity company PLN will issue
bonds worth Rp 1 trillion (US$432.5 million) this year to partly
finance new power projects.

PLN president Djiteng Marsudi said yesterday that the plan of
the bond issuance had been approved by the government.

Around 80 percent of the proceeds raised from the bond
issuance will be used to finance the construction of transmission
and power plant projects in Java, he said.

The projects are part of the government's priority electricity
projects in the current-five year development plan, he added.

Djiteng said that PLN needs at least Rp 7.8 trillion per year
to finance its projects, which include power plants with a
combined capacity of 9,552 megawatts and transmission networks
with a total length of 10,548 kilometers.

He said that in addition to the funds from the bond issuance,
PLN would also use an equity fund of around Rp 1.3 trillion,
government expenditures of around Rp 900 billion, export credits
of Rp 3.8 trillion and banking loans of Rp 800 million to finance
this year's power projects.

The bonds will be the fourth to be issued by PLN. Last
February, the company issued bonds worth Rp 1 trillion, much
higher than those worth Rp 600 billion issued in 1993 and Rp 300
billion in 1992.

Djiteng refused to disclose when the new bonds would be
floated.

"We have first to assess the market demand. We don't want the
bonds to have the same fate as those sold last year," he said.

Djiteng said that the Rp 1 trillion bonds floated in February
last year were unusually undersubscribed on the impact of the
tight market liquidity.

He said that the interest rates of the new bond facility,
which will have a maturity period of about four to seven years,
would be floated on the basis of banking deposit rates. (hen)