Indonesian government's subsidy debt to PLN hits $3.1b

The slow disbursement of funds has put a strain on the state utility’s cash flow.

The government of Indonesia owes $3.1b (IDR48t) to the state-owned power company PLN for electricity subsidy costs incurred over the last years. It includes $1.5b (IDR23t) for subsidies in 2018 and $1.6b (IDR25t) for 2019.

Also read: PLN's obligations to IPPs could hit $7.2b by 2021

The slow disbursement of funds, power infrastructure investment and electricity price caps have put a strain on PLN's cash flow. Consequently, the company recently issued $112m (IDR1.73t) in bonds, started to review its capital expenditures and initiated talks with banks over reprofiling debt.

As part of a COVID-19 relief programme, Indonesia intends to provide $226m (IDR3.5t) of electricity subsidies for the country’s poorest households until June 2020, including free electricity for 450 VA customers and 50% discount for 900 VA customers.

This article was originally published by Enerdata.