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Assessment of Social and Economic Impacts of the Additional State Equity Participation/Penyertaan Modal Negara (PMN) in PT PLN (Persero)

PT PLN (Persero) is one of several SOEs that received injections of Penyertaan Modal Negara (PMN) funds for the 2015, 2016 and 2019 fiscal years. With the allocation of PMN funds, PT PLN (Persero) was assigned by the government to work on electricity installation projects with the aim to provide access to electricity so that it can be evenly distributed. There are three programs of Electricity Infrastructure Development funded by PMN, such as the power plant, transmission and distribution programs including Rural Electricity/ Listrik Pedesaan (Lisdes). PT PLN (Persero) collaborates with the International Center for Applied Finance and Economics (InterCAFE) LPPM IPB to measure developmental impacts (economic and social) of the injection of the Additional State Equity Participation (PMN) funds from the Ministry of Finance Indonesia for PT PLN (Persero).

The Additional of PMN Improve Economic Performance

The impact of PMN on PT PLN have made a positive contribution to the increase in real GDP accompanied by an increase in other indicators that support real GDP from the expenditure side, including consumption, investment, government spending, exports and imports. In addition to the increase in the macroeconomic component, the impact arising from the distribution of PMN also increases fiscal revenue from taxes.

There was also increase in output in 19 economic sectors with five (5) sectors have a large increase value, Forestry and Hunting Sector; electricity and gas sector, Fisheries Sector; Food Crops Agriculture Sector; and the Personal, Household, and Other Services Sector.

The positive impact was also felt on sectoral exports where there were 15 sectors that experienced an increase in export value due to the implementation of the policy, including the Food Crops Agriculture Sector; Individual, Household, and Other Services Sector; Livestock and Its Product Sector; Fisheries Sector; and the Spinning, Textile, Apparel and Leather Industry Sector.

Form of Support for the Acceleration of National Strategic Projects/Proyek Strategis Nasional (PSN)

The priority electricity projects of PT PLN (Persero) that receive PMN funding are a unified project that supports each other. For example, the construction of the Batang PLTU project is one of the National Strategic Programs (PSN) which is the highlight of the government and is written in the 2015-2019 National Medium-Term Development Plan (RPJMN). With the addition of power plant capacity and its supporting transmission network, the national electricity demand will be fulfilled and evenly distributed so that the electrification ratio in 2020 can reach 97%.

The allocation of PMN to PT PLN (Persero) projects has created good economic conditions and will directly have an impact on accelerating the completion of programs in the electricity sector, the electricity sector will become a catalyst for other national strategic projects such as the telecommunications sector, Energy, Transportation, Roads and Bridges, Oil and Gas, Ports, Water and Sanitation and Rail.

Reduce Social Inequality

PMN funding for electricity projects of PT PLN (Persero) has increased the absorption of sectoral workforce, especially in 16 economic sectors including those that experienced a relatively large increase in labor absorption, such as the Forestry and Hunting Sector; Fishery; Hospitality; Real Estate and Corporate Services; Banks and Insurance; and Spinning, Textile, Clothing and Leather Industries. This was followed by an increase in household income, especially Rural Non-Agricultural Households and Non-Agricultural Households.  Another social impact is a reduction in the level of poverty both nationally and urban and rural poverty.