June 25, 2020 / 7:05 AM / 14 days ago

Indonesia state power company PLN cuts capex by nearly half this year

JAKARTA, June 25 (Reuters) - Indonesia’s state electricity company Perusahaan Listrik Negara (PLN) has slashed its capital expenditure by 46.4% in 2020, its chief executive told parliament on Thursday.

PLN’s capital expenditure fell to 53.59 trillion rupiah ($3.80 billion) from an initially budgeted 100 trillion rupiah, Zulkifli Zaini said, adding that some non-priority projects will be postponed.

“The impact of COVID-19 has encouraged PLN to review its investment plan on electricity projects, adjusting the current demand,” he added.

Zaini also said that PLN is 500 trillion rupiah in debt as of the end of last year, and that its annual investment of 100 trillion rupiah a year came from bank loans and not government funds.

“Nearly 100% of the funds are from loans, as a banker, I know it’s not healthy,” Zaini said.

The funds were needed to develop 35 gigawatts of new power by 2029.

PLN reported last week a 38.88 trillion rupiah ($2.77 billion) loss in the first three months of 2020.

Zaini told parliament that losses were mostly attributed to foreign exchange losses and that the Indonesian government is expected to pay PLN 48 trillion this year. ($1 = 14,120.0000 rupiah) (Reporting by Wilda Asmarini; Writing by Fathin Ungku; Editing by Martin Petty)

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