Indonesia: Strengthening Sumatra Power Distribution Results-Based Project (AIIB-P000819)

Regions
  • East Asia and Pacific
Geographic location where the impacts of the investment may be experienced.
Countries
  • Indonesia
Geographic location where the impacts of the investment may be experienced.
Specific Location
Sumatra region
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • Asian Infrastructure Investment Bank (AIIB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
PT Perusahaan Listrik Negara (Persero)
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Energy
  • Infrastructure
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 500.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 500.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 1,723.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Government Documents
Media Documents
Primary Source

Original disclosure @ AIIB website

Updated in EWS Oct 1, 2024

Disclosed by Bank Aug 8, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the AIIB, the project development objective is to increase access to electricity services and to improve the reliability and efficiency of their delivery in the Sumatra region.

The proposed Results-Based Project (RBP) will support PT Perusahaan Listrik Negara (PLN) to finance the distribution component of the 10-year General Plan for Electricity Supply (RUPTL) within the Sumatra region for the period 2024-2028. The RBP will focus on three main results areas: (i) to increase access to sustainable and climate resilient electricity; (ii) to improve the reliability of electricity supply and services by strengthening the distribution network; and (iii) to improve the efficiency of the distribution system by reducing losses.

The RBP will exclude any activities with significant adverse environmental and social (ES) risks and impacts or high-value contracts above a specified threshold. The exclusion criteria will be developed when undertaking the RBP assessments on technical, ES, and fiduciary system of PLN during the preparation.

The Project will generate ES benefits by enhancing electricity access, reliability, and transmission efficiency in the regions. Key potential ES risks and impacts of this RBP are related to the construction and operation of new and/or upgraded distribution lines, substations and the solar photovoltaic (PV) plus battery energy storage system (BESS). Whether the Project may have Associated Facilities (e.g. access road and transmission substations that are not under the Project) will be assessed during the RBP preparation.

As of 2021, the energy mix in the Sumatra region was still heavily dominated by fossil energy sources, such as coal and gas.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

As stated by the AIIB, with an estimated expenditure cost of USD 1,723 million, AIIB will provide Results-Based Financing of USD 500 million with sovereign guarantee from the Republic of Indonesia. PLN will contribute USD 1,080 million as counterpart funds and the remaining is expected to be financed by other financiers.

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

As stated by Bloomberg, Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara generates, transmits, and distributes electricity. The Company develops electricity infrastructure such as transmission networks, substations, and distribution networks, as well as increase installed capacity for power supply. Perusahaan Listrik Negara serves customers in Indonesia.

Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - PT PLN Persero Client Energy

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

AIIB Team Leader:

Ziwei Liao - Senior Investment Officer
Email: ziwei.liao@aiib.org

Borrower - PT Perusahaan Listrik Negara (Persero):

Sinthya Roesly - Director of Finance, PLN
Email: s.roesly@pln.co.id

ACCESS TO INFORMATION

You can submit an information request for project information at: https://www.aiib.org/en/contact/information-request/index.html

ACCOUNTABILITY MECHANISM OF AIIB

The AIIB has established the Accountability Mechanism for Project-Affected People (PPM). The PPM provides Òan opportunity for an independent and impartial review of submissions from Project-affected people who believe they have been or are likely to be adversely affected by AIIBÕs failure to implement the ESP in situations when their concerns cannot be addressed satisfactorily through Project level GRMs or AIIB Management processes.Ó Two or more project-affected people can file a complaint. Under the current AIIB policy, when the bank co-finances a project with another development bank, it may apply the other bank's standards. You can refer to the Project Summary Information document to find out which standards apply. You can learn more about the PPM and how to file a complaint at: https://www.aiib.org/en/about-aiib/who-we-are/project-affected-peoples-mechanism/how-we-assist-you/index.html

The complaint submission form can be accessed in Arabic, Bahasa Indonesia, Bengali, Chinese, English, Tagalog, Hindi, Nepali, Russian, Turkish, or Urdu. The submission form can be found at: https://www.aiib.org/en/about-aiib/who-we-are/project-affected-peoples-mechanism/submission/index.html

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How it works