Indonesian state-owned electricity giant PLN has secured a 500-million-USD “green loan” with a guarantee from the World Bank’s Multilateral Investment Guarantee Agency (MIGA) to keep seven renewable energy projects alive amid the COVID-19 pandemic.

Indonesia's oldest geothermal power plant (PLTP), the Kamojang plant in West Java (Source: https://www.thejakartapost.com/)

In its recent statement, PLN said MIGA would guarantee 95 percent of the loan for five years through a consortium of international lenders including the US’s JPMorgan, Singapore’s Oversea-Chinese Banking Corporation (OCBC), Germany’s KfW IPEX-Bank, and Japan’s Sumitomo Mitsui Banking Corporation (SMBC).

According to PLN finance director Sinthya Roesly, in a period of difficult liquidity and loan markets, PLN achieved financing cost efficiency by implementing a structure that attracts international creditors.

Meanwhile, MIGA said in its online proposal that the loan’s purpose was to provide working capital for PLN to buy electricity from seven existing renewable energy projects, including two hydropower plants in North Sumatra and five geothermal power plants.

PLN, whose power plants are nearly 40 percent coal-fired, has been working to diversify fundraising channels as international lenders close their wallets to coal out of environmental commitments.

Source: VNA