Indonesia Power needs Rp 6.3 trillion a year for expansion

PLN’s subsidiary Indonesia Power will need investment funds of at least Rp 6.3 trillion a year to boost the company’s electricity production capacity.

Speaking to the press on Thursday, the president director of IP, Abimanyu Suyoso said that part of the investment needs would be raised from the company’s initial public offering (IPO) which would be launched in the first half of next year.

“Our total equity is worth about Rp 44.4 trillion, about 10 percent of the total shares could be sold to the public,” he was quoted as saying. He added that IP must be injected with fresh funds in order to maintain its market share which has continued to decline during the past several years.

According to him, the company, at present, controls about 57 percent of the country’s electricity market. But he said, without the injection of the fresh investment funds, the market’s share would continue to decline.

For the IPO purpose, the company had conducted roadshow in San Fransisco, Boston, New York, London, Hongkong and Singapore to promote the IPO plan to overseas investors.

“The response is quite positive,” he said, adding that the funds to be raised from the IPO would be used to build small and medium-scale power plants such as mine-mouth power plants in coal-rich provinces. The construction of such power plants would be less costly, he added.

At present IP operates a number of large scale power plants in Java and Bali. (godang)