PEFINDO: PT PLN Nusantara Renewables (PLN NR) rated idA+ with a stable outlook

(February 27, 2024)--The corporate rating reflects PLN NR’s strong likelihood of support from PT Perusahaan Listrik Negara (Persero) (PPLN, idAAA/Stable), strong profile of its strategic partners, and the government’s commitment to expand the renewable energy. The rating is constrained by its indirect access to the subsidiaries’ operating cash flow, limited access to external funding, and the execution risks in its joint venture companies.

We may raise the rating if PLN NR’s joint venture companies are able to generate significantly stronger cash flow than projected, particularly after the divestment of PT Shenhua Guohua Pembangkitan Jawa Bali (SGPJB) and higher dividend distribution from SGPJB to the Company. We may also raise the rating if PLN NR successfully develops more joint venture companies to strengthen its market position among other renewable energy players. The rating may be lowered if there is a strong indication of weakening support from PPLN, or if the Company becomes more aggressive in financing its projects by incurring higher level of debt than projected.

Established in December 2015, PLN NR is PPLN’s subsidiary with an unrestricted subsidiary status to the Parent’s Indenture Global Bond covenant. Currently, PLN NR has two joint venture companies in operation phase and two companies under construction. As of September 30, 2023, PLN NR was owned by PT PLN Nusantara Power (99.9997%) and Yayasan Kesejahteraan PT Pembangkitan Jawa-Bali (0.0003%). (ends)