ADB-PLN Electrical Grid Strengthening Program

Summary Financing of transmission. Date 23rd Feb 2021 State-budget infusion cheapest option for PLN to fund new transmission. FINDINGS Multilateral funding more expensive but cheaper than corporate loans and have longer maturity. Adopting PPPs for transmission may be better value for PLN than borrowing but cost will depend on risk and PLN's ability to increase revenue from new transmission lines. There is a lack of an evidence base for PPPs as no value-for- money studies have been conducted to date. Conduct a VFM analysis for the high priority projects before deciding on the financing route. ADB 11

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