PLN to receive Rp 7.5 trillion loan from PIP

The government?s investment arm Pusat Investasi Pemerintah (PIP) will provide soft loan worth up to Rp 7.5 trillion (about US$825 million) to state electricity company PLN to help the latter finance its power plant and grid expansion plans.

The loan agreement was signed in Jakarta on Tuesday by PIP?s chairman Soritaon Siregar and PLN?s president director Nur Pamudji.

Soritaoan said besides carrying a long period of up to 15 years with a grace period of 5 years, the loan also carry a fixed intetest rate of 5.25 percent a year. The interest rate is based on Bank Indonesia?s benchmark interest rate in December.

PLN said it would use the loan from IPI to precure new power transformers and finance new distribution facilities including power grids. The loan disbursement can be made a year after the signing of the loan agreement. (godang/giok)