PT Perusahaan Listrik Negara (Persero)PT Perusahaan Listrik Negara (Persero) in Enhancing Growth and Competitiveness on Energy Sector

Syofvi F RoekmanHead of Strategic Planning DivisionHead of Strategic Planning Division

Borobudur Hotel, JakartaMay 20th, 2014

Electricity Industry Overview

Still Favorable Macroeconomic OutlookThe ongoing transformation of Indonesia from an agricultural to a service-oriented economy is expected to drive GDP growth and underpin further demand for electricity consumption.

(in TWh)

g p y p

271306329

355384

340390,280,0

Growing Electricity DemandGDP Growth1

142155

168181

194207

221236

252

103 113

188206

225245

328284

306

140,190,240,290,340,

140,0

210,0

2%

4%

6%

46 5157 64

70 7785 94

103

-10,040,090,0

0,0

70,0

2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E

Java-Bali Outside Java-Bali

0%

2%

2011 2012 2013 2014E 2015E 2016E 2017E 2018E

Indonesia Global

PLN expects to benefit from the growth in electricity demand given its dominant presence in the Indonesian electricity market

Projected electricity demand growth of 8.29% per annum on average

Java Bali Outside Java Bali

Indonesia is the largest economy in Southeast Asia 5.9% average real GDP growth over the period of 2008 2012

Indonesia is projected to be the 7th largest economy in the world by between 2013 and 2022E

Java-Bali represents ~75 80% of energy demand requirements in Indonesia and more than 70% of total generating capacity

Expansion of the commercial sector has significantly contributed to the th f l t i it d d

p j g y y2030 (McKinsey)

Large consumer base with fast growing spending power Consumer expenditure has grown at a CAGR of 13.8% from 2000

2012

66 6% of the population is of working age (15 64 years old) and growth of electricity demand 66.6% of the population is of working age (15 64 years old) and 68.5% were 39 years and younger as of 2012

Source: Economist Intelligence Unit, IMF, McKinsey, PLN.1. Percent change, constant prices.

Electrification Ratio Demonstrates Room for GrowthAmple room for growth in electricity sector based on current Electrification Ratio in Indonesia.

Low electrification ratio of 80.4% compared to other Asian Developing Countries underscores undersupply PLN is mandated to implement Fast Track Programs for capacity expansion to meet Indonesias growing demand

Aim to achieve >90% electrification rate by 2019

Electrification Ratio for Asian Developing Countries1

Aim to achieve >90% electrification rate by 2019 The role of IPPs in providing domestic power will also become increasingly important as the domestic electricity consumption increases

Growing of Indonesias Electrification Ratio

100.0% 99.7% 99.4% 97.6%87.7% 83.3% 80.4%

75.0%67.4%

2019 target: > 90%

62.4% 63.8%66.5%

74.3% 76.2%80.4%

(2) 2008 2009 2010 2011 2012 2013

Electrif ication Ratio

Source: PLN, IEA World Energy Outlook 20121. Percentage of population with electricity access2. Indonesias figure as of December 31, 2013

Growing Indonesia Electricity Market Benefits PLN Backed by strong macroeconomic indicators, energy demand in Indonesia is expected to grow significantly in the next few years.

10,2

Growing of Peak Load Relatively Low Per Capita Electricity Consumption1(in MW) (in MWh per Capita)

y

55 259,5

64,3

8,4 7,8

5,9

4,23,3

2,3

31,935,0

38,141,3

44,547,9

51,355,2

1,1 0,7 0,7 0,6 0,4

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n2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Peak Load (MW)

2

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With higher income levels, increasing urbanization and improving standard of living, electricity demand is expected to continue to increase

Ongoing transformation from an agricultural to a manufacturing-oriented h l l d ti l l i t t l i th th f

Indonesias per capita consumption of electricity, electrification levels and the installed capacity levels are among the lowest in Asia

Need for substantial increase in generating capacity is evident by

Source: 1. World Bank.2. Indonesias figure as 2013

Source: PLN, MEMR

economy has also played a particularly important role in the growth of demand for electricity

Need for substantial increase in generating capacity is evident by increasing number of power outages in recent years

As the major provider of electricity in Indonesia,As the major provider of electricity in Indonesia, PLN expects to benefit from Indonesias growth in demand for electricity.

Company OverviewCompany Overview

Corporate Structure

Ministry of State Owned Enterprises (MSOE)

Ministry of Energy and Mineral Resources (MEMR) G I ill ti t h ldResources (MEMR)

Ministry of Finance (MoF)

Ministry of the Environment

National Development Planning A th it (BAPPENAS)

GoI will continue to hold 100% of PLN

PT PLN (Persero)Oversight

Authority (BAPPENAS)

PT PLN TarakanPT PLN BatamPT Indonesia Power

g

PT Pembangkitan Jawa Bali

Regional Fully Integrated Electric Utility

Regional Fully Integrated Electric UtilityElectricity Generation Electricity Generation

PT Indonesia Comnets Plus

Telecommunications for the Electricity Sector

PT PLN Batubara

Coal Supplier for PLN

PT Prima Layanan Nasional Enjiniring

Engineering and Construction Services

Majapahit Holding B.V.

Financial Institution

PT PLN Geothermal

Geothermal Energy Generation

PT Pelayaran Bahtera Adhiguna

Shipping Activities

PT Haleyora Power

Electricity Supplier

Note: Excludes Joint Ventures.

PLN Presence in the Indonesian Electricity MarketPLN is the only integrated electric utility company in Indonesia, controls the majority of generation capacity and is the sole transmission and distribution provider.p

38 502 MW of installed capacity out which 39 581 kmc of transmission lines 809 980 kmc of distribution lines

Transmission DistributionGeneration

38,502 MW of installed capacity out which represents 83% of capacity in Indonesia

39,581 kmc of transmission lines 81,343 MVA of transmission transformer capacity

809,980 kmc of distribution lines 42,079 MVA of transformer capacity

IPP17%

PLN remains the countrys largest electricity producer and the only business entity in charge of transmitting and distributing electric power in Indonesia

PLN100%

PLN100%PLN

83%

PLN remains the country s largest electricity producer and the only business entity in charge of transmitting and distributing electric power in Indonesia Under the New Electricity Law (No. 30/2009), PLN has the first priority to supply electricity in a specific area before such right can be awarded to anyone

else

If PLN declines to undertake a public electricity supply business for a certain area, the Government or regional governments may offer this right to regional-owned companies, private enterprises or cooperatives

f G If there are no regional-owned companies, private enterprises or cooperatives that elect to supply electricity in that area, the Government is obligated to instruct SOEs (which includes PLN) to supply electricity to the area

Extensive Generation NetworkPLN controls 83% of Indonesias total installed generation portfolio of 46,245 MW

Total

Hydro 3,519 MWGeothermal 568 MWSteam-turbine 15,710 MW

MalukuDiesel 295 MWOthers 1 MWTotal 296 MW

KalimantanHydro 32 MWSteam-turbine 266 MW

Combined Cycle 60 MW

SumateraHydro 864 MWGeothermal 110 MWSteam-turbine 1,332 MW

SulawesiHydro 223 MWGeothermal 80 MWSteam-turbine 112 MW

Combined Cycle

8,814 MW

Gas-turbine 3,690 MWDiesel 6,193 MWOthers 8 MWIPP 7,743MWTotal 46 245MW

Gas-turbine 179 MWDiesel 1,382 MWOthers 0 MWIPP 56 MWTotal 1,975 MW

Combined Cycle 858 MWGas-turbine 1,294 MWDiesel 2,284 MWOthers 0 MWIPP 1,202 MWTotal 7,944 MW

Gas-turbine 183 MWDiesel 948 MWOthers 3 MWIPP 695 MWTotal 2,244 MW

Total 46,245MW

SumateraKalimantan

S l i

MalukuPapua

Java-BaliHydro 2,392 MWGeothermal 375 MW

Sulawesi

NTTNTBJava-Bali

PapuaDiesel 266 MWHydro 6 MWTotal 272 MW

NTTDiesel 237 MWGeothermal 3 MW

NTBSteam-turbine 30 MW

Geothermal 375 MWSteam-turbine 13,970 MWCombined Cycle 7,896 MWGas turbine 2,034 MWDiesel 457 MWOthers 1 MWIPP 5 791 MW

Hydro 1 MWOthers 2 MWTotal 243 MW

Diesel 324 MWHydro 1 MWOthers 1 MWTotal 356 MW

IPP 5,791 MWTotal 32,916MW

As of December 31, 2013

Companys PerformancePLN is the only state-owned power utility company and the only fully-integrated power utility company in Indonesia.

PLN is Indonesias state-owned electric utility company, wholly-owned by the Republic of Indonesia and is represented by the Ministry of State-Owned Enterprises

PLN is the major provider of all public electricity and electricity infrastructure in Indonesia, including power generation, transmission, distribution, construction of power plans and retail sales of electricity

Charges for electricity are based on electricity tariff rates that are set by the Government Law No. 19/2003 on State-Owned Enterprises (SOEs): the Government is obligated to provide subsidy to PLN for the difference between the price charged for

electricity and the cost to produce electricity

Key Business Segments1

Generationy Controls 83% of installed generating capacity

approximately 38,502 MW including rentals by an increase 5.2% (vs 36,612MW as at 2012)

y Owns and operates 5,593 generation

Transmissiony Sole provider of power transmission in Indonesiay Approximately 39,581 kmc of transmission lines by

an increase 3.9% (vs. 38,096 kmc as at 2012)

y 81,343 MVA of transmission transformer capacity

Distributiony Sole distributor of electricity to end customers in

Indonesia

y Approximately 809,980 kmc of distribution lines and 42,079 MVA of distribution transformer capacity by an increase 9 2% and 3 5%y Main purchaser of electricity from Independent

Power Producers (IPPs)by an increase 5.6% (vs. 77,037 MVA as at 2012) capacity by an increase 9.2% and 3.5% (vs 741,957 kmc and 40,654 MVA as at 2012)

y Serving approximately 54 million customers

Electricity Sales Customer Base(in TWh) (in millions)

158 0174,0 187,5 54 0

129,0 134,6147,3 158,0

,

38,6 40,1 42,445,9 49,8

54,0

Note: PLN is also the provider of electricity of last resort, in that if PLN is not supplying a particular area and there are no regional-owned companies, private enterprises or cooperatives that elect to supply electricity in that area, the Government is obligated to instruct SOEs (which includes PLN) to supply electricity to the area.

1. As of December 31, 2013

2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013

Business Snapshot as of December 31, 2013PLN distributes and sells electricity to several customer types. The electricity sold is either generated by PLN or purchased from IPPs.p

Generation Composition PLNs Generating Capacity

HydroDiesel

Others0,02%

Transmission Network Detail Distribution Network Detaily 500 kV interconnected transmission

system with 5,052 kmc

275 kV t i i t ith

y Medium-voltage line distribution network of 339,137 kmc

L lt li di t ib ti

31%

2%

28%

12%

27%22% 2%

12%

76%

24%

Own Production

76%

Purchased24%

Hydro9%

Steam-Turbine

41%Gas-Turbine

Combined Cycle23%

Geothermal1%

Diesel16% y 275 kV transmission system with

1,028 kmc

y 150 kV transmission system with 29,228 kmc

y 4,272 kmc of transmissions

y Low-voltage line distribution network of 470,843 kmc

y 371,662 units of distribution transformers with total capacity of approximately 42,079 MVA

12%26%

76%

Total: 216,189 GWh

Turbine10%

Total: 38,502 MW

systems up to 70 kV

Electricity Transmitted and Distributed by Customer Type Number of Customers by Type(in millions)(in TWh)

65 1 72,177,2129,0 134,6

147,3 158,0174,0 187,5

38,6 40,1 42,445,9 49,8

54,0

7,9 8,6 9,3 9,8 10,7 11,522,9 24,8 27,2 28,3 31,0 34,548,0 46,2 51,0 54,7 60,2

64,450,2 54,9 59,8

65,1 ,

1,0 1,1 1,2 1,2 1,3 1,41,7 1,9 1,9 2,0 2,2 2,40,05 0,05 0,05 0,05 0,05 0,06

35,8 37,1 39,3 42,646,2 50,1

2008 2009 2010 2011 2012 2013

Public Business Industrial Residential2008 2009 2010 2011 2012 2013

Public Business Industrial Residential

Efficient Operations with Continuing Improvements

PLN has continued to successfully improve its operating efficiency.

Improving and Controlling T&D and Overheads Costs2

Improving Fuel Mix Reducing Oil Consumption 2012 from 15% (29.6TWh) to 12% (26.6TWh) in 2013 1

Implementation of Efficiency Program

21%7%9% 6%

5% 6%25% 22% 20% 23%

15% 12%

Fuel Mix (IPP + PLN Production)

3 Maintaining Collection Period

4 Implementing Centralized Online Payment System, Centralized Administration System & Cash Pooling, Centralized Non Cash Loan Facility, On Line Trade Finance

5Expanding Prepaid System Intensively Increasing Customers in 2013 (13.15M) vs 2012 (7.83M) up to 68% and has been No.1 in the world for serving largest

28% 28% 27% 30%33% 35%

2% 2% 2% 2%2% 2%13% 18% 19% 18%

20% 21%7%7% 6%

5 vs 2012 (7.83M) up to 68% and has been No.1 in the world for serving largest prepaid customers

6 Joint Procurement for Maintenance and Material Distribution

7 Manufacturers are the only parties eligible to bid in generation, transmission and distribution tender processes, open book procurement

24% 23% 22% 22% 25% 24%

2008 2009 2010 2011 2012 2013

IPP Coal Geothermal Natural Gas Hydro Fuel Oil

13 3

16,7

System Average Interruption Duration Index (SAIDI)(Hour/customer)

10,5% 9,9% 9,7% 9,4% 9,2% 9,4%12,0%

Transmission and Distribution Losses

13,3

7,0 4,7 3,9

5,8 2,2% 2,2% 2,3% 2,3% 2,4% 2,3%

8,5% 7,9% 7,6% 7,3% 7,0%7,8%

0 0%

4,0%

8,0%

2008 2009 2010 2011 2012 20130,0%

2008 2009 2010 2011 2012 2013Transmission Losses Distribution Losses System Losses

Opportunity for 2013 -2022

Demand Growth 2013-2022

26 TWh

66 TWh TWh

TWh188 385

Sumatera: 10,6%

TWh

Kalimantan: 10,7%Maluku: 10,9%

2013 2022Indonesia: 8,4%

18 44

Sulawesi: 10,8%

Papua: 10%

144 275

IT : 10,8%

18 TWh

TWh

13JB : 7,6%

TWh TWh Nusa Tenggara: 11,1%

Additional Capacity for Power Plants

Total additional capacity until 2022=> 60 GW.

MW

> 60 GW.

CFPP : 37,7 GWGeothermal : 6,2 GWCCPP : 4,8 GWGas : 3,6 GWDiesel : 1,1 GWH d 6 9 GWHydro : 6,9 GWOthers : 0,2 GW

Type of Power Plants

Source : RUPTL 2013-2022

Investment Needed for Electricity Sector 2013 -2022

PLN P Pl t 38 billi US$PLN Power Plants : 38 billion US$PLN+IPP Power Plants : 90 billion US$Transmission : 17 billion US$Distribution : 15 billion US$

Billion US$

Total PLN : 68 billion US$Total PLN+IPP : 122 billion US$

Source: RUPTL 2013-2022

What is Needed by PLN?

1 Strengthening the company's capital:1. Strengthening the company s capital: PLN internal revenue generation, through rate increase and or subsidies, which can improve

the ability of the investment.Government support in the provision of investment funds in the State Capital (PMN) to reduce

the loan burden. PLN loan restructuring, among others, by swapping the Sub-Loan Agreement (SLA) to PMN,

as well as the restructuring of the company's direct loan

2. Controlling power consumption: Energy Conservation Program, among others, through demand side management, pricing

patterns by time of use the campaign uses energy saving appliances and otherspatterns by time of use, the campaign uses energy saving appliances and others. Load growth control among others by controlling the power connection.

3 New Business Model Scheme:3. New Business Model Scheme:Power WheelingBOT Generation and Transmissionothersothers

Opportunities in Electricity Sector

D d G th ll f f th i t tDemand Growth call for further investmentForm of Partnership:

FundingFundingIPP with PPAPower WheelingExcess PowerEPC ContractorsBOT of Generation and TransmissionBOT of Generation and TransmissionOthers

New Paradigm: Can the market mechanism drive the investors to involve in Electricity Sector without Sovereign Guarantee and PPA? (which has not been applied in Indonesia yet)

Thank You