PLN's pipeline of deals continues to flow

IJ Global is reporting that the Request for Proposal has been issued to bidders on PLN's Jawa 1 2x800MW gas-fired, combined-cycle power project

The procurement process was launched in May 2015 and, while, I understand, the issuance of the RFP was postponed, reaching issuance of RFP within 8 months isn't bad for a project of this magnitude.

IJ Global are also reporting that China Oceanwide, PJB and Shanghai Electric consortium is rumoured to be the preferred bidder for the Jawa 5 2x1000MW coal-fired project. 

According to this presentation on BKPM's website, tendered 7,600MW of capacity in 2015, and anticipates completing procurement for 37 projects, representing 14,887MW of capacity in 2016. 

 PLN IPP Procurement division, Market Sounding: IPP Procurement in 2016 presentation. 8 December 2015. Presentation available  here

PLN IPP Procurement division, Market Sounding: IPP Procurement in 2016 presentation. 8 December 2015. Presentation available here

As I wrote in my article in PrakarsaLearning From Indonesian Best Practice: A Way Forward for Public Private Partnerships in Indonesia, PLN has figured out a model that can deliver a significant pipeline of projects that are attractive to private sector investors, delivered via transparent tender processes that maximise value for money.

Another critical thing that PLN has demonstrated is that this model is scalable. When pressed by Jokowi to deliver the 35,000MW program, PLN has shown an ability to dramatically accelerate their pipeline of projects being delivered to market.

When I worked in private advisory, I would typically have 2-3 meetings a month with people wanting a briefing on infrastructure investment opportunities in Indonesia. Usually these people had heard of the government's ambitious targets to get hundreds of billions of dollars of investment over short time periods. The meetings weren't usually very long, because there were literally no opportunities, other than trying to buy assets on the secondary market, or as service providers to SOEs, or infrastructure delivery ministries that were the only ones delivering projects!

Now, the message is very clear: go to PLN.

As I said in my Prakarsa paper, those proposing projects in other sectors are now in direct competition with PLN for investors' money. If they want to pull investors away from PLN, they should try to emulate their model, as it's clearly working.

I wonder how long it will be until our PPP pipeline looks like this*.


*Or even like the Philippines'.