Govt fully guarantees PLN?s power plant projects

The government has issued a presidential decree to fully guarantee the state electricity firm PT Perusahaan Listrik Negara’s (PLN) coal-fired power plant projects to be built under the government's fast track programs to provide an additional power supply of 10,000 MW.

 

Head of Fiscal Policy Division at the Ministry of Finance Anggito Abimanyu said in Jakarta Tuesday that President Susilo Bambang Yudhoyono signed the Presidential Decree No. 91, 2007 last Wednesday, which amended the Presidential Decree No. 86, 2006.

 

Under the new presidential decree, the government will take over the obligation to pay loan to creditors and include it into the state budget in case PLN defaults on the payment.

 

Anggito said the new decree is aimed to provide legal certainty for creditors of the project. 

Thanks to the new decree, the government has the flexibility in seeking loan from any bank as long it offers the lowest interest rate. “In this way, the government has stronger bargaining power in terms of seeking loan for the project,” he added. (*)