PGN told to use domestic financing sources

State Minister of State Enterprises Laksamana Sukardi has asked the management of state owned gas distribution company PT Perusahaan Gas Negara (PGN) to use domestic financing alternatives to finance the company's pipeline projects, Bisnis Indonesia reported on Tuesday.

"It is better for PGN to use domestic financing source such as rupiah bond because this financing option will benefit both the state and local investors," he was quoted as saying by the daily.

According to Laksamana, with its healthy financial condition, PGN has the flexibility to choose what types of financing options that really suit its business. "The financial market in Indonesia is much more stable at present, and there is also a growing confidence from foreign investors in the country's financial market," he added.

PGN is currently preparing the issuance of rupiah denominated bonds to finance its huge pipeline projects. At present, the company mostly uses dollar-denominated bonds to finance its projects. (*)