Pefindo: “idAAA” rating for PT Indonesia Power

Monday, September 21 2020 - 05:58 PM WIB

PEFINDO has assigned its “idAAA” rating to PT Indonesia Power (Indonesia Power). The outlook for the corporate rating is “stable”.

An obligor rated idAAA has the highest rating assigned by PEFINDO. Its capacity to meet its long-term financial commitments, relative to that of other Indonesian obligors, is superior.

The corporate rating reflects Indonesia Power’s integrated operations and finances with its parent company, PT Perusahaan Listrik Negara (Persero) (PPLN, idAAA/stable); its very strong market position as a power generator; and relatively high demand for electricity in the medium term. The rating is constrained by a high reliance on funding from its Parent for sizeable capital expenditure (capex). The rating could be lowered if PEFINDO views a significant reduction in linkage with or support from the Parent.

Indonesia Power is a power generation company fully owned by PPLN. Its main business is to produce and supply electricity to the Parent. It also provides operation and maintenance (O&M) services for PPLN’s power plants. In 2019, it managed power plants with a total installed capacity of 16,297 megawatts (MW) across Indonesia. As of June 2020, owned and operated 16 power plants throughout the country, including in Suralaya, Priok, Kamojang, Saguling, Mrica, Semarang, Grati and Bali. It also had four power plants under subsidiaries and joint ventures. A subsidiary, an investment company named PT Putra Indo Tenaga, is an active joint cooperation with other private companies to build power plants, including PT Indo Raya Tenaga (jointly controlled with PT Barito Wahana Lestari) to build PLTU Jawa 9-10. In the future, it plans to develop 20 power plants with a total capacity of 4,332 MW.

Indonesia Power has securitized the future flow of its account receivables from the component-A revenue for 2017-2022 of the Suralaya coal fired power plants unit 1-4 (PLTU Suralaya unit 1-4) with an asset-backed securities scheme. The value of the first phase of securitization was IDR4.9 trillion, at a price of IDR4.0 trillion. Component-A revenue is the payment made by PPLN to Indonesia Power as a capital cost refund, which is calculated based on net capability capacity (Daya Mampu Netto / DMN) at the level of a particular unit or power plant readiness. It consists of the depreciation cost of productive assets, corporate tax, and profit margin on production, which are stated in the tariff each year. The proceeds of securitization were used to finance the completion of power plant projects and capital injections in several subsidiaries. (ends)

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