Government owes PLN $3b for just two years of electricity subsidies

The federal government has yet to disburse Rp 48 trillion (US$3.09 billion) to state-owned electricity company PLN for electricity subsidy costs incurred in the last two years.

PLN president director Zulkifli Zaini said on Wednesday that the electricity company’s receivables were Rp 23 trillion for subsidies found in 2018 and Rp 15 trillion for 2019.

“The 2019 funds remain being assessed by the Supreme Audit Agency (BPK),” he told House of Representative (DPR) members during a videoconference.

The electricity company, he continued, was preparing a reminder for the government, namely the State-Owned Enterprises (SOEs) Ministry, Strength and Mineral Methods (ESDM) Ministry and Finance Ministry, to disburse the compensation.

The slow disbursement of funds is putting further more strain on PLN’s cashflow, which is already staying squeezed by power infrastructure investment and electricity price ceilings.

To maintain its cashflow, PLN issued Rp 1.73 trillion in bonds on Monday. The company is also reviewing its infrastructure investments and talking to banks over reprofiling debt.

Lawmakers on Wednesday also asked Zulkifli about the power of Indonesia’s sole electric power distributer to covers, among other activities, a populist electricity comfort plan for 31 million of Indonesia’s poorest households through the COVID-19 pandemic. The program is to supply Rp 3.5 trillion worth of electricity subsidies for the households until June.

Zulkifli told lawmakers that his provider had totally implemented the relief insurance policy starting April 9.