INO: Java-Bali 500-Kilovolt Power Transmission Crossing

Transcription

1 Audited Project Financial Statements Project Number: Loan Number: 3083/8276 Period covered: 1 January 2017 to 31 December 2017 INO: Java-Bali 500-Kilovolt Power Transmission Crossing Prepared by Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara For the Asian Development Bank Date received by ADB: 26 June 2018 The audited project financial statements are documents owned by the borrower. The views expressed herein do not necessarily represent those of ADB s Board of Directors, Management, or staff. These documents are made publicly available in accordance with ADB s Public Communications Policy (2011) and as agreed between ADB and the Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara.

2 PERUSAHAAN PERSEROAN (PERSERO) PT PERUSAHAAN LISTRIK NEGARA ADB Loan 3083-INO and 8276-INO: Java Bali 500 kv Power Transmission Crossing Project Special-Purpose Statements of Project Expenditures and Financing

3 Special-Purpose Statements of Project Expenditures and Financing Table of Contents Pages Independent Auditors Report Independent Accountant s Report Special-Purpose Statements of Project Expenditures and Financing Statement of Actual Project Expenditures and Financing 1 Statements of Cumulative Actual Project Expenditures 3 Notes to Special-Purpose Statements of Project Expenditures and Financing 5

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8 Statement of Actual Project Expenditures and Financing Actual/ Plan Financed Plan Financed (Unaudited) Actual Financed (Unaudited) ADB AIF TOTAL ADB AIF TOTAL ADB AIF Description Notes US$ US$ US$ US$ US$ US$ % % By Category : 1 Works Rupiah 2, 3a Equipment 2, 3b Rupiah 3, ,145 3, , % 94.88% US$ 6, ,721 6, , % 94.97% CHF % 94.44% EUR % 95.16% Subtotal 11,881 1,319 13,200 11,330 1,252 12, % 94.92% 3 Consulting Services 2, 3c Rupiah % % YEN % 94.59% Subtotal % 95.56% Total Rupiah 3, ,220 3, , % 94.98% US$ 6, ,721 6, , % 94.97% CHF % 94.44% EUR % 95.16% YEN % 94.59% Total 12,276 1,364 13,640 11,707 1,295 13, % 94.94% 1

9 Statement of Actual Project Expenditures and Financing By Contract : Description Design, supply, installation, testing and commisioning of extension and enhancement of 11 substations in Java and Bali Actual/ Plan Financed Plan Financed (Unaudited) Actual Financed (Unaudited) ADB AIF TOTAL ADB AIF TOTAL ADB AIF Notes US$ US$ US$ US$ US$ US$ % % 2, 3a, 3b Rupiah 3, ,145 3, , % 94.88% US$ 6, ,721 6, , % 94.97% CHF % 94.44% EUR % 95.16% Subtotal 11,881 1,319 13,200 11,330 1,252 12, % 94.92% Project implementation support and capacity Building Java Bali 500 kv power transmission crossing project 2, 3c Rupiah % % YEN % 94.59% Subtotal % 95.56% Total Rupiah 3, ,220 3, , % 94.98% US$ 6, ,721 6, , % 94.97% CHF % 94.44% EUR % 95.16% YEN % 94.59% Total 12,276 1,364 13,640 11,707 1,295 13, % 94.94% 2

10 Statements of Cumulative Actual Project Expenditures As of December 31, 2017 and 2016 December 31, 2017 December 31, 2016 ADB AIF TOTAL ADB AIF TOTAL Description Notes US$ US$ US$ US$ US$ US$ By Category : 1 Works Rupiah 2, 3a Equipment 2, 3b Rupiah 3, , US$ 7, , CHF EUR Subtotal 12,719 1,406 14,125 1, ,543 3 Consulting Services 2, 3c Rupiah EUR YEN Subtotal Total Rupiah 4, , ,036 US$ 7, , CHF EUR YEN Total 13,623 1,508 15,131 1, ,129 3

11 Statements of Cumulative Actual Project Expenditures As of December 31, 2017 and 2016 By Contract : Description December 31, 2017 December 31, 2016 ADB AIF TOTAL ADB AIF TOTAL Notes US$ US$ US$ US$ US$ US$ Design, supply, installation, testing, and commisioning of extension and enchancement of 11 substation in Java and Bali 2, 3a, 3b Rupiah 4, , US$ 7, , CHF EUR Subtotal 12,911 1,427 14,338 1, ,756 Project implementation support and capacity Building Java Bali 500 kv power transmission crossing project 2, 3c Rupiah EUR YEN Subtotal Total Rupiah 4, , ,036 US$ 7, , CHF EUR YEN Total 13,623 1,508 15,131 1, ,129 4

12 Notes to Special-Purpose Statements of Project Expenditures and Financing 1. General On December 30, 2013, the Republic of Indonesia (the Borrower ) and the Asian Development Bank ( ADB ) entered into Loan Agreement No INO under which ADB agreed to lend to the Borrower from ADB s ordinary capital resources an amount of US$224,000 to finance Part 1: Expansion of 500 kv transmission network; Part 2: Development of 500/150 kv and 150/20 kv Substations; and Part 3: Project management (the Project ). The Loan Agreement effective as of September 29, The Borrower relayed the proceeds of the loan to the Company under Subsidiary Loan Agreement No. SLA-1257/DSMI/2014 dated February 13, On December 30, 2013, ADB and Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara (the Company ) entered into a Project Agreement of Loan 3083-INO, wherein ADB agreed to make to the Borrower a loan of US$224,000 on conditions that the proceeds of the loan where to be available to the Company and that the Company was required to undertake a certain obligation towards ADB. The Borrower also applied to the ASEAN Infrastructure Fund Limited ( AIF ) for a loan amounted of US$25,000 to finance the Project, on a joint basis, to be administered by ADB, under Loan Agreement No INO. The Borrower relayed the proceeds from the AIF loan to the Company under Subsidiary Loan Agreement No. SLA-1258/SMI/2014 dated February 28, The Company is required to comply with financial covenants as stated in the Loan Agreement and Project Agreement dated December 30, 2013 including (1) self-financing ratio shall be at least 15%, (2) debt service coverage shall be at least 1.35 times from the period beginning January 1, 2013 to December 31, 2014 and shall be at least 1.5 times for the period beginning January 1, 2015, of its estimated maximum debt service requirements of the Company for any succeeding fiscal year on all its debts including the debt incurred, (3) the ratio of debt to equity shall not be greater than 75 to 25, and the covenant that all proceeds of the loan withdrawn from ADB should be utilized developing the Project as agreed in the ADB Loan No INO. The maturity date of the ADB Loan No INO is September 15, The last date for disbursement of the ADB Loan No INO is on September 30, Since the project is also financed by ADB 8276-INO (participated by AIF), AIF also confirmed the loan closing date in conjunction with the ADB loan. The Project is expected to increase Java-Bali power transmission network to meet future power demand in the Bali Island, while improving long-term power supply security and efficiency. The project comprises of the following works: 1. Expansion of 500 kv Transmission Network This component includes the construction of: a. double circuit transmission line between Paiton substation and Watudodol in Java; b. double circuit transmission line across Java-Bali Strait between Watudodol and Segara Rupek; c. double circuit transmission line between Segara rupek and Gilimanuk around the perimeter of the Bali Barat National Park; and d. double circuit transmission line between Gilimanuk and Antosari. 2. Development of 500/150 kv and 150/20 kv Substations This component includes the construction of: a. the extension of existing 500 kv Paiton substation in East Java; b. the construction of a new substation (500/150 kv) in Bali; and c. extension/ upgrading of 11 substations (150/20 kv), 5 in Bali and 6 in Java. 3. Project Management This component includes consulting services to support the Project Management in construction supervision, safeguards and capacity building. 5

13 Notes to Special-Purpose Statements of Project Expenditures and Financing (Continued) As of December 31, 2017, two contracts with a total contract value of US$ 20,255 have been awarded under the Project and Project Implementation Consultant Services. Details of the contract are as follows: Contract Package Contract No. Project Contractor Contract Signed Effective Contract Value *) Original Currency **) Eqv. In US$ Package P PJ/DAN.02.02/ Design, Supply, ABB - Indokomas February 26, 2016 March 24, 2016 US$ 9,221,642 9,222 DIRREGJBTB/2016 Installation, Testing Consortium EUR 648, and Commissioning of CHF 825, Extension and Rp 88,666,903,577 6,540 Enhancement of 11 Substations in Java and Bali Consultant 0309.Pj/DAN02.06/ Project Implementation Joint Venture Newjec Inc., April 16, 2015 April 8, 2015 US$ 130, DIR/2015 Support and Capacity ELC Electroconsult S.P.A. EUR 173, Building Java Bali and PT Connusa Energindo JPY 129,455,600 1, kv Power Transmission Rp 18,745,057,750 1,383 Crossing Project Total 20,255 *) Contract value denominated in currencies other than US$ are presented as US$ equivalent using the exchange rate prevailing as of December 31, **) in full amount Ratio of contract Package 3 and project implementation consultant financed by ADB and AIF with percentage of financing for each category is 90:10, respectively. 2. Basis of Accounting of the Special-Purpose Statements of Project Expenditures and Financing a. Presentation of Statements of Project Expenditures and Financing The special-purpose statements of project expenditures and financing have been prepared in the format and basis agreed between ADB and the Company which are not intended to be presented in conformity with Indonesian Financial Accounting Standards. The special-purpose statements of project expenditures and financing were prepared for the purpose of complying with Section 2.09 of Project Agreement of ADB Loan 3083-INO between ADB and the Company. The special-purpose statements of project expenditures and financing are presented in US Dollar ( US$ ). The plan project expenditures that are denominated in currencies other than US$ are adjusted to reflect the prevailing rates at that date. The conversion rate used by the management on December 31, 2017 are as follows: Middle rate Currency US$ **) Rupiah *) EUR CHF YEN *) Exchanged at 1,000 Rupiah to US Dollar **) In full amount The actual project expenditures denominated in currencies other than US$ are translated to US$ in accordance with the exchange rates used at the time the withdrawal authorization is issued by ADB and AIF. The actual project expenditures financed by the Company denominated in Indonesian Rupiah ( Rp ) are translated to US Dollar ( US$ ) using the historical rate of transactions in which the actual project expenditures occured. b. Plan Project Expenditures The plan project expenditures financed by ADB and AIF are presented based on the Approval Letter of Budget Performance List ( DIPA ) for Subsidiary Loan Agreement issued by the Directorate General of Budget, Ministry of Finance of the Republic of Indonesia. 6

14 Notes to Special-Purpose Statements of Project Expenditures and Financing (Continued) c. Actual Project Expenditures Actual project expenditures are recognized based on the Withdrawal Authorization ( WA ) issued by ADB and AIF. ADB financed and AIF financed actual project expenditures are presented excluding Value Added Tax ( VAT ), since based on tax regulation, disbursements financed by ADB and AIF are not subject to VAT. 3. Actual Project Expenditures by Category As of December 31, 2017, actual project expenditures by category are as follows: a. Works ADB AIF Total US$ US$ US$ Balance at beginning of year Additions Total b. Equipment ADB AIF Total US$ US$ US$ Balance at beginning of year 1, ,543 Additions 11,330 1,252 12,582 Total 12,719 1,406 14,125 c. Consulting Services ADB AIF Total US$ US$ US$ Balance at beginning of year Additions Total Project Implementation Consultant ( PIC ) provides consulting services to assist the Company in preparation and evaluation of bidding documents, procurement of goods and services, supervision of implementation and monitoring for progress of the Projects. 4. Financial Covenant Calculations As per Loan Agreement and Project Agreement dated December 30, 2013, the Company is required to satisfy with the self-financing ratio, debt service coverage ratio and debt to equity ratio requirements as part of its compliance with financial covenants stipulated by ADB. Prior to December 31, 2017, ADB granted waiver No. S-817/MK.08/2017 dated November 9, 2017 addressed to the Ministry of Finance of the Republic of Indonesia. The said waiver relieves the Company from the requirement to comply with the aforementioned financial covenants effective until December 31,

15 Notes to Special-Purpose Statements of Project Expenditures and Financing (Continued) Financial covenant calculations as of and for the year ended December 31, 2017, are as follows: i. Self-financing ratio (should be greater than 15%) 2017 in Millions Rp in US$ 3 CASH FLOW FROM OPERATING ACTIVITIES 1 Operating revenues Cash receipts from customers 2 257,336,702 18,994,442 Government subsidy received 2 50,595,348 3,734,525 Proceeds from sale of assets not used in operations 2 45,983 3,394 Net non-operating income Financial income 2 1,066,842 78,745 Subtotal 309,044,875 22,811,106 ALL EXPENSES RELATED TO OPERATIONS 1 1. Total operating expenses 2 275,474,094 20,333,193 Less non-cash expenses: Depreciation 2 (29,160,597) (2,152,391) Amortization 2 (285,676) (21,086) Employee benefit 2 (1,586,029) (117,067) Bad debt expense 2 (231,295) (17,072) Allowance for inventories obsolence 2 (5,713) (422) Income tax paid 2 5,495, ,662 Net Total operating expenses 249,700,695 18,430, Debt service requirements Interest expense paid 2 17,894,129 1,320,795 Payment of bonds payable 2 9,509, ,912 Payment of two-step loans 2 2,588, ,095 Payment of Government and non-bank Government financial institution loans 2 1,043,793 77,044 Payment of bank loans 2 12,901, ,252 Payment of electricity purchase payable 2 328,199 24,225 Payment of KIK-EBA 2 149,414 11,028 Payment of lease liabilities 2 4,429, ,936 Total Debt Service Requirement 48,844,424 3,605, Decrease in working capital other than cash ending working capital of the year Total current assets 2 93,797,251 6,923,328 Total current liabilities 2 (139,074,658) (10,265,328) Less: Cash and cash equivalents 2 (42,291,959) (3,121,639) (87,569,366) (6,463,639) Beginning Working Capital of the year Total current assets 2 98,569,077 7,275,545 Total current liabilities 2 (121,623,355) (8,977,218) Less: Cash and cash equivalents 2 (41,909,223) (3,093,388) (64,963,501) (4,795,061) Decrease in working capital of the year (22,605,865) (1,668,578) Cash dividends paid and other cash distributions of surplus 2 2,153, ,933 Subtotal 278,092,473 20,526,459 NET INTERNAL OF CASH 30,952,402 2,284,647 Annual average of PLN's capital expenditures incurred, or expected to be incurred: 1 Current Year Additions in property, plant and equipment and construction in progress 2 85,210,519 6,289,528 Previous Year Additions in property, plant and equipment and construction in progress 2 55,800,543 4,118,729 Annual average of company's capital expenditures 70,505,531 5,204,129 Consolidated Self-Financing Ratio 1 (Minimum 15%) 43.90% 43.90% 8

16 Notes to Special-Purpose Statements of Project Expenditures and Financing (Continued) ii. Debt Service Coverage Ratio (at least 1.5) OPERATING REVENUES 1, in Millions Rp in US$ 3 Sales of electricity 246,586,856 18,200,978 Government's electricity subsidy 45,738,215 3,376,012 Customer connection fees 7,113, ,056 Others revenues 1,594, ,725 Less: Bad debt expenses (231,295) (17,072) TOTAL OPERATING REVENUE 300,802,163 22,202,699 OPERATING EXPENSES 1,2 Total operating expenses (275,474,094) (20,333,193) Less: Non-cash expenses Depreciation 29,160,597 2,152,391 Employee benefit 1,586, ,067 Bad debt expense 231,295 17,072 Amortization 285,676 21,086 Allowance for inventory obsolence 5, TOTAL OPERATING EXPENSES (244,204,784) (18,025,155) NET OPERATING INCOME 56,597,379 4,177,544 NON OPERATING INCOME 1,2 Financial Income 1,066,842 78,745 Other non operating income 3,409, ,693 Income taxes (4,115,955) (303,805) NET NON OPERATING INCOME 360,828 26,633 NET REVENUE 56,958,207 4,204,177 DEBT SERVICE REQUIREMENT Interest paid 17,894,129 1,320,795 Principal repayments 30,950,295 2,284,492 TOTAL DEBT SERVICE REQUIREMENT 48,844,424 3,605,287 CONSOLIDATED DEBT SERVICE COVERAGE RATIO 1 (MINIMUM 1.5)

17 Notes to Special-Purpose Statements of Project Expenditures and Financing (Continued) iii. Debt to Equity Ratio (Should not be greater than a ratio 75 to 25) DEBT in Millions Rp in US$ 3 Two-step loans 2 34,221,468 2,525,942 Government and non-bank Government financial institution loans 2 7,352, ,734 Lease liabilities 2 20,585,177 1,519,426 Bank loans 2 142,566,111 10,523,037 Bonds payable and sukuk ijara 2 101,354,360 7,481,131 KIK - EBA loans 2 3,538, ,189 Electricity purchase payable 2 7,376, ,464 TOTAL DEBT 316,995,070 23,397,923 EQUITY 1,2 869,416,604 64,173,059 CONSOLIDATED DEBT TO EQUITY RATIO 1 (MAXIMUM 3 TIMES) Notes: 1). As defined in the ADB Loan 3083-INO and 8276 INO: Java-Bali 500 kv Power Transmission Crossing Project Loan Facility Agreement dated December 30, 2013, 2). As derived from audited consolidated financial statements of the Company and subsidiaries as of and for the year ended December 31, ). Translated using Bank Indonesia middle rate as of December 31,