REPUBLIKA.CO.ID, JAKARTA -- The State Enterprises Minister Rini Soemarno stated that state-owned electricity company PT PLN has the ability to complete the 35 thousand MW electricity procurement project, despite some uncertainties on the company's financial situation.

"It is normal that the financial minister had warned PLN, despite its numerous projects, to maintain the company's debt to equity ratio (DER)," Soemarno said here on Thursday.

She noted that during her term as state enterprises minister, she had always reminded state-run firms to maintain their debt ratio and increase assets quality.

"I always stress the board of directors on debts. We have to prepare for the worst scenario, and that is normal," the minister added.

She admitted that a company could not avoid debts, but there should be leveraging.

"We have to be sure that we have invested in valuable assets; for instance, a power plant should produce electricity efficiently and adequately. In time of need, the asset could be sold for other investment," she continued.

Earlier on Wednesday, Finance Minister Sri Mulyani Indrawati has reportedly sent an official letter to Energy and Mineral Resources Minister Ignasius Jonan and Soemarno outlining state power company PLN's ailing financial performance in the past three years and its toll on the state budget.

The letter, numbered S-781/MK.08/2017 dated Sept. 19, was leaked by an unnamed source.

On the government's 35 thousand MW electricity procurement project, Soemarno remarked that some 9 thousand MW of the project would be handled by PLN, while the remaining 26 thousand MW would be funded by independent power provider (IPP).

"There is no revision on target. Maybe people have a wrong perception that the 35 thousand MW project was wholly funded by PLN. But in fact, some 26 thousand MW of it would be funded by IPP," she revealed, adding that it could minimize the risk for PLN in the transmission and sub-station project.

"Basically, the project was handled by PLN alone, but some of them are in brown field, making it possible to seek partners as investors," Soemarno concluded.

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