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State electricity company PT Perusahaan Listrik Negara needs $7.6 billion through 2014 to add 6,415 megawatts of power-generation capacity.

The power plants the company will build are part of a government plan to add about 10,000 MW of generation capacity through 2014 after a first phase to add 10,000 MW of capacity is completed in 2013.

“We need funding for the projects,” Bambang Praptono, director of planning and technology, said on Thursday. “It can be from project loans or bonds.”

In the second phase of the project, PLN will build power plants with capacity totaling 6,415 MW, while another 4,262 MW of electricity-generating power plants will be constructed by independent power producers.

The power plants PLN and other companies will build include geothermal plants that will generate 3,583 MW of electricity and coal-fired power plants with a generating capacity of 4,294 MW, Praptono said.

Also on Thursday, PLN vice president Rudiantara announced that the company had planned a Rp 1.5 trillion ($159 million) bond issue for January. He said the proceeds would be used to finance power-transmission and distribution projects that were part of the first phase of the 10,000 MW program.

The bonds are scheduled to be listed on the Indonesia Stock Exchange (IDX) on Jan. 13.

They will be issued in two tranches: Rp 1 trillion in conventional bonds and Rp 500 billion in shariah bonds. It will be PLN’s ninth conventional bond and fourth shariah bond.

The conventional bonds will have grace periods of seven years and 10 years.

The seven-year bonds have an indicative yield of between 10.9 percent and 12.1 percent, while the 10-year bonds will yield between 11.9 percent and 12.9 percent. The bond issue, which is being underwritten by state-owned PT Danareksa Sekuritas, PT Mandiri Sekuritas and PT Bahana Securities, has been rated “idAA-” by state-owned ratings agency PT Pefindo.

PLN will likely return to a profit this year for the first time since 2001 thanks to lower oil prices and a switch from gasoline to cheaper coal and natural gas at its plants, an analyst said on Thursday.

PLN was predicted to post net profit of Rp 8.1 trillion ($954 million) for 2009, Budi Susanto, an analyst at PT Danareksa Sekuritas, said in a report issued on Thursday.

This would be a dramatic reversal from last year, when the company lost Rp 12.3 trillion, in part because of record-high oil prices during the first half.

The company has suffered net losses every year since 2001.

Gasoline costs accounted for 83 percent of PLN’s energy outlay last year, with natural gas, coal and hydropower making up the rest.
This year, PLN’s gasoline plants are expected to make up just 60 percent of power-generating costs, with cheaper fuel sources — coal, natural gas, geothermal and hydropower — making a much larger contribution, Rudiantara said.

The company in November predicted a profit of more than Rp 7 trillion for 2009. PLN’s fuel costs have fallen sharply this year, thanks to lower oil prices and the switch to cheaper energy sources, raising its bottom line and increasing cash flow.