S&P: Indonesia's Electricity Firm PLN Needs better Regulatory Framework
Credit rating agency Standards & Poor's (S&P) says Indonesia (and Malaysia) need to increase efforts to build a good track record of timely and reasonable power tariffs adjustments in order to ensure decent returns for investors and recover their costs. Delays in energy price revisions, which are sometimes the result of political strategy, are the key risk that jeopardize the financial stability (and credit profile) of state-owned utility company Perusahaan Listrik Negara (PLN). S&P therefore advises the Indonesian government to enhance efforts to ensure a sound regulatory framework (i.e. a transparent tariff rate-setting mechanism).