PLN to sell shares in three units next year

The government hopes to raise from Rp 2 trillion to Rp 5 trillion (about US$550 million) in proceeds from divestment of shares in three subsidiaries of state electricity company PLN next year. The Jakarta Post reported on Wednesday.

Roes Aryawijaya, deputy for the energy sector at the Office of the State Minister for State Enterprises, said part of the proceeds would be used to help finance PLN?s massive coal-fired power plant projects.

Roes, speaking late Monday at a hearing with House Commission VII on energy, did not name which units would be sold to investors, but said the companies would be those which turned a profit in the last three years.

Of its six subsidiaries, five fit the above requirement: PT Indonesia Power, PT PJB, PT PLN Batam, PT PLN E and PT Indonesia Comnet Plus, which provides telecommunications services. Meanwhile, PT PLN Tarakan has only made a profit during the past two years.

Roes said the government would still maintain more than a 51 percent stake in the companies. He added that the divestment plan had been agreed upon during the last PLN? shareholders meeting, and was confident that the company?s management would pursue the plan.

The company?s acting president director, Djuanda Ibrahim, said the management had decided to launch an initial public offering for Indonesia Power next year in a bid to help turn the unit into a transparently run and major player in Southeast Asia.

He added that other divestment programs were still being discussed. The government has asked the company to develop coal-fired power plants with up to 10,000 MW capacity within the next three years, in a bid to help avoid a power crisis in the country and reduce costly fuel consumption at home. The program would require a huge fund outlay.

Meanwhile, Energy and Mineral Resources Minister Purnomo Yusgiantoro said Tuesday that PLN would hold open bidding to select contractors for the construction of 30 planned coal-fired power plants with total capacity of 2,522 MW located outside Java. It will build another 10 plants in Java.

But Djuanda was quoted by Bloomberg as saying that the firm may not conduct open bidding for the plants, if the selected companies can provide some of the financing.

Plants outside Java ?are of smaller capacity and local enterprises are able to build them?, he said. (*)