Project Description
On January 8, 2021, MIGA issued guarantees of US$522.3 million to cover non-shareholders loans by Citibank, N.A., Singapore Branch of the United States of America, DBS Bank Ltd. of Singapore, JPMorgan Chase Bank, National Association, Singapore Branch of the United States of America, KfW IPEX-Bank GmbH of Germany, Landesbank Baden-Württemberg Singapore Branch of Germany, Oversea-Chinese Banking Corporation Limited of Singapore, Standard Chartered Bank (Singapore) Limited of Singapore, and PT Bank BTPN Tbk of Indonesia (together, the Guarantee Holders) to the Indonesian state-owned enterprise PT Perusahaan Listrik Negara (Persero) (PLN) to finance medium-term working capital expenses in relation to its U.S. Dollar denominated tariff payments under Power Purchase Agreements to purchase electricity from the seven existing renewable projects (the Project). The Guarantee Holders had applied for a MIGA guarantee covering non-shareholder loans of US$500 million in principal and associated future interests for a term up to 5 years against the risk of Non-Honoring of Financial Obligations by a State-Owned Enterprise (NHFO-SOE).1
Environmental Categorization
The Project has been categorized as Category B according to the MIGA Policy of Environmental and Social Sustainability. Click here to view Environmental and Social Review Summary prepared by MIGA for this investment in the Project.
Development Impact
Like most other countries, the Indonesian economy has been severely affected by the COVID-19 global pandemic. The Project enabled PLN to access medium-term credit from commercial lenders in the context of the challenges presented by the COVID-19 pandemic. By doing so, the Project has reduced PLN’s ongoing borrowing costs, whilst also diversifying its sources of funds.
The Project specifically limits the use of proceeds to PLN’s payments for purchased electricity from the seven existing renewable projects, supporting Indonesia in its efforts to evolve and diversify its power supply mix to increase renewable energy generation, and ensuring the financial stability of a vital part of the energy sector at a challenging time.
Timely payments to IPPs will also signal to foreign investors that the IPP sector, including renewable energy, remains investable and that PLN remains committed to honor its obligations under the PPAs with USD denominated tariff payments.
MIGA’s support for this Project forms part of MIGA’s US$6 billion COVID-19 response package and is aligned with the World Bank Group’s Fast Track COVID-19 Facility to assist member countries in addressing the global pandemic and its impacts. The Project is also consistent with MIGA’s ongoing strategic priority areas that includes supporting projects that have climate change benefits.
1 The guarantee was expired as of December 23, 2025.
