PLN told to sell bonds to fund power plants

The Indonesian government has asked state power utility PT Perusah?an Listrik. Negara (PLN) to sell bonds to finance the construction of non-oil based power plants because the government won?t help finance the construction.

PLN has been asked to build 8,000 megawatts of power plants in two and a half year to ease electricity shortage in the country, Energy Minister Purnomo Yusgiantoro said Monday.

"The project should be financed by corporate loans and selling bonds," Purnomo said. He did not elaborate on the size of the bonds.

Indonesia needs an additional 12,000 megawatts of power in 2010 to avoid electricity shortages, President Susilo Bambang Yudhoyono said on Monday.

The country?s electricity demand may reach 40,000 megawatts by 2010,Listrik Negara, which needs government subsidies to provide cheap power in the nation, doesn?t have funds to build power plants in the nation.

The company had an operating loss of Rp 27 2 trillion ($3 billion) in 2005, after an operating profit of Rp 2.56 trillion the previous year, according to the Indonesian audit agency.

Rising oil prices prompted Listrik Negara to seek ways to save costs by using more natural gas to generate power after the government scrapped plans to raise power prices this year

Electricity was supplied to 53 percent of Indonesian homes, last year, the second-lowest rate among 12 Asian nations, including China, India and South Korea, the World Bank said. (*)