Issuer Summary: PT PLN (Persero)

Report date: 2026-06-05
Issuer: PT Perusahaan Listrik Negara (Persero)
Relevant bond issuer: PT PLN (Persero); Majapahit Holding B.V. where notes are guaranteed by PLN
Bond structure reference: senior unsecured bonds, sukuk, medium-term notes and PLN-guaranteed subsidiary notes

1. Business Snapshot and Recent Developments

PT Perusahaan Listrik Negara (Persero) (“PLN”) is a state-owned, vertically integrated power utility responsible for Indonesia’s electricity supply. Generation, transmission and distribution, retail supply, power purchases from IPPs, and the receipt of government subsidies and compensation all sit within the same credit story. As a result, PLN is difficult to read either as a conventional private-sector utility or as the sovereign itself. For bond investors, the starting point is this dual character: PLN plays a role in nationwide electricity supply that is very difficult to replace, while its standalone financials are highly sensitive to tariff freezes, fuel costs, FX, the cash conversion of compensation receivables, and capital expenditure.

The reservation left in the previous report—“FY2025 audited consolidated financial statements not yet reflected”—has been resolved, as the FY2025 audited consolidated financial statements have now been confirmed. The auditor is Rintis, Jumadi, Rianto & Rekan, and the audit report is dated 2026-05-19. The FY2025 audited financial statements were confirmed on PLN’s official Financial Information page on 2026-06-05. Separately, secondary media reported, by reference to Indonesia Stock Exchange disclosures, that the FY2025 financial statements were submitted on 2026-05-22. In this report, financial figures are primarily sourced from the official PDF, while 2026-05-22 is treated as the event date for disclosure tracking. The FY2025 annual report itself has not been confirmed or reflected in this report.

The FY2025 results are more complex than a simple “higher revenue, lower profit” story. Total revenue increased from Rp545.4 trillion on a restated FY2024 basis to Rp582.7 trillion. Electricity sales revenue was Rp367.1 trillion, government electricity subsidies were Rp87.5 trillion, and compensation income was Rp112.7 trillion, bringing the combined amount of subsidies and compensation income to Rp200.2 trillion. However, operating profit declined from Rp60.6 trillion to Rp49.2 trillion, and profit for the year fell sharply from Rp21.2 trillion to Rp7.26 trillion. Profit was compressed by fuel and lubricants expense, purchased power expense, FX losses, finance costs, and tax.

The more important issues are cash flow and receivables from the government. FY2025 operating cash flow was only Rp9.92 trillion, a sharp decline from Rp75.4 trillion in FY2024. Cash received for compensation was Rp65.3 trillion, and cash received for government subsidies was Rp81.0 trillion, for a combined Rp146.4 trillion. The gap versus the Rp200.2 trillion of subsidies and compensation income recognised in accounting terms was substantial, and receivables from the government increased from Rp43.3 trillion at end-2024 to Rp110.7 trillion at end-2025. The subsequent event in which PLN received Rp27.1 trillion on 2026-02-05 as part of the FY2025 compensation receivable shows that the collection channel is functioning, but as of end-2025 the cash-conversion lag was weighing on liquidity.

On the funding side, short-term bank borrowings increased significantly. Cash and cash equivalents at end-2025 were Rp42.2 trillion, down from Rp61.4 trillion at end-2024. Short-term bank borrowings increased from Rp21.8 trillion to Rp58.3 trillion, while total bank borrowings reached Rp211.8 trillion. Bonds and sukuk, in aggregate across current and non-current maturities, were broadly flat at Rp195.8 trillion. Subsequent to year-end, on 2026-02-03, PLN issued GMTNs comprising USD500 million five-year notes and USD1 billion ten-year notes. This confirms continued access to the international market, but also indicates that funding needs remain substantial.

PLN’s current profile and recent changes can be summarised as follows.

2. Industry Position and Franchise Strength

PLN’s business base is supported less by competitive advantage than by institutional indispensability. Indonesia is a broad archipelagic country, and electricity supply is basic infrastructure for households, industry, mining, communications, transportation, and public services. Blackouts or supply shortages would have a direct impact on social life and economic activity. PLN performs this supply function nationwide and is embedded in the national power system through its generation subsidiaries, transmission and distribution network, long-term contracts with IPPs, tariff framework, and government subsidy and compensation mechanisms.

This indispensability is the strongest business factor supporting PLN’s credit quality. A private company could withdraw from regions with weak profitability or customer segments with difficult pricing, but PLN must continue supplying electricity as a public service provider. The government also has a very strong incentive to maintain PLN’s credit standing, because disruption to electricity supply is directly linked to economic growth, inflation, industrial policy, and political stability.

However, a strong franchise does not automatically mean high profitability. PLN’s tariffs are influenced not only by economic rationality, but also by household affordability, inflation, industrial competitiveness, elections and politics, and energy security. When tariffs do not fully reflect supply costs, subsidies and compensation support PLN. However, there is a time lag before such compensation is approved, audited, budgeted, paid, and converted into cash. This time lag appears in movements in government receivables and short-term borrowings.

Based on previously confirmed tariff-related items, PLN has 37 tariff categories, of which only 13 are subject to tariff adjustment. This tariff adjustment mechanism provides an institutional path to move tariffs closer to the cost of electricity supply, but it is not fully automatic. In ESDM’s tariff decisions, FX, Indonesian crude price, inflation, and coal prices are among the reference factors. However, tariffs were left unchanged in multiple quarters in 2025 despite macro factors that would have implied upward pressure. Accordingly, PLN’s revenue protection depends less on “automatic tariff adjustment” and more on how promptly government compensation and subsidies fill the shortfall created by tariff freezes.

The FY2025 results reconfirmed this structure. Electricity sales revenue was Rp367.1 trillion and accounted for the bulk of total revenue. However, government electricity subsidies of Rp87.5 trillion and compensation income of Rp112.7 trillion together amounted to more than half of electricity sales revenue. PLN’s revenue base is not built on customer tariffs alone; it is integrated with government policy compensation. This is credit-supportive, but it also creates dependence on government finances and policy predictability.

The tariff, subsidy, and compensation framework should be read as follows.

PLN’s franchise is “strong but not autonomous.” Its status as an irreplaceable nationwide power infrastructure provider forms the foundation of support-inclusive credit quality. At the same time, PLN has limited pricing discretion and is not a company that can fully absorb supply costs, FX, fuel, IPP power purchases, and capex on its own. Bond investors need to look not only at the demand base and government support expectations, but also at the creation and collection speed of compensation receivables, changes in short-term borrowings, and the political nature of tariff decisions.

3. Segment Assessment

In PLN’s credit analysis, it is easier to look at credit-relevant functions rather than only accounting-based geographic segments. The main functions are generation, transmission and distribution/retail, power purchases from IPPs, government subsidies and compensation, and capital market funding. Each affects revenue, costs, liquidity, and government support expectations in different ways.

The generation function supports PLN’s indispensability. Generation assets and the power supply network are national infrastructure, and maintenance, replacement, and expansion continue in order to respond to demand growth, regional electrification, industrial policy, and the energy transition. However, generation is exposed to fuel prices, FX, environmental regulation, and the generation mix. Fuel and lubricants expense in FY2025 was Rp198.6 trillion, up from Rp179.3 trillion in FY2024. Procurement conditions for coal, gas, oil-based fuels, geothermal, and other sources affect PLN’s cost base.

The transmission and distribution/retail function is the entry point for collecting tariffs from customers nationwide, which forms the repayment source. Sales revenue supports PLN’s underlying business cash flow, but tariff levels are not freely determined. If policy decisions continue to restrain customer tariffs, the shortfall is offset in accounting terms by subsidy and compensation income, but government receivables and short-term funding needs increase until cash is collected.

Power purchases from IPPs add supply capacity but also create fixed payment obligations. Purchased power expense in FY2025 was Rp195.2 trillion, one of the largest cost items alongside fuel and lubricants expense. IPP contracts support the depth of power supply, but when demand underperforms or tariffs are frozen, the fixed nature of purchased power costs can easily pressure profit and cash flow. PLN’s role as the sole major offtaker strengthens government support expectations, but it also brings long-term contractual obligations.

The government subsidy and compensation function is the most important quasi-segment in PLN’s credit story. Subsidy and compensation income totalled Rp200.2 trillion in FY2025, up from Rp177.2 trillion in FY2024. This shows that government support is actually entering accounting revenue. However, cash received for compensation was Rp65.3 trillion, well below compensation income of Rp112.7 trillion. For subsidies as well, cash received was Rp81.0 trillion versus recognised income of Rp87.5 trillion. For PLN, support being recognised and support arriving as cash are separate credit issues.

Capital market funding is an indispensable function supporting PLN’s capex and refinancing. At end-2025, bonds and sukuk totalled Rp195.8 trillion across current and non-current maturities, while bank borrowings totalled Rp211.8 trillion. In February 2026, PLN issued USD1.5 billion of GMTNs and maintained access to the international market. Third-party rating agency assessments are useful for confirming government support expectations and market access, but they do not mean that individual bonds become direct obligations of the government.

The functional credit assessment is as follows.

The key point in this structure is that revenue and cash do not move at the same speed. PLN may recognise accounting revenue, but if cash collection is delayed, it becomes more dependent on short-term borrowings and bond issuance. Therefore, segment assessment needs to look not only at which function generates profit, but also at which functions feed through into government receivables, short-term borrowings, and bond market access.

4. Financial Profile and Analysis

PLN’s FY2025 financial profile shows strong support-inclusive business continuity, but clear pressure on standalone cash generation and short-term liquidity. Total revenue increased, but costs and cash-conversion lags weighed heavily, and both profit for the year and operating cash flow declined significantly. One year of lower profit does not, by itself, mean that PLN’s support-inclusive credit quality has weakened materially. However, the results confirm that if timely payment of government compensation and subsidies is delayed, standalone financial headroom can narrow quickly.

On the income statement, total revenue in FY2025 was Rp582.7 trillion, up 6.8% from Rp545.4 trillion on a restated FY2024 basis. Electricity sales revenue was Rp367.1 trillion, government electricity subsidies were Rp87.5 trillion, and compensation income was Rp112.7 trillion. Revenue growth reflected not only higher electricity sales revenue, but also an increase in government subsidies and compensation income. PLN’s revenue is determined not only by sales volume and tariffs, but also by how the government covers shortfalls created by tariff policy.

On the cost side, fuel and lubricants expense was Rp198.6 trillion and purchased power expense was Rp195.2 trillion, bringing these two items alone to Rp393.8 trillion. This was up about 10% from the FY2024 combined amount of Rp357.9 trillion, absorbing a large part of the increase in total revenue. FX losses were Rp12.5 trillion, up from Rp6.78 trillion in FY2024. Finance costs remained high at Rp24.9 trillion. As a result, operating profit declined to Rp49.2 trillion and profit for the year fell sharply to Rp7.26 trillion.

The cash-flow picture shows an even more severe change. Cash received from customers in FY2025 was Rp379.1 trillion, broadly flat versus Rp378.7 trillion in FY2024. Cash received for compensation was Rp65.3 trillion, down from Rp80.6 trillion in FY2024. Cash received for government subsidies increased to Rp81.0 trillion from Rp75.8 trillion in FY2024, but this did not fully offset the decline in compensation receipts. Operating cash flow was only Rp9.92 trillion, a sharp decline from Rp75.4 trillion in FY2024.

On the balance sheet, the most notable change is the increase in receivables from the government. Receivables from the government increased from Rp43.3 trillion at end-2024 to Rp110.7 trillion at end-2025. The breakdown is compensation receivables of Rp84.9 trillion, electricity subsidy receivables of Rp12.3 trillion, and other government receivables of Rp13.6 trillion. This indicates that government support has been recognised in accounting terms, while cash collection has lagged. The receipt of Rp27.1 trillion in compensation receivables on 2026-02-05, subsequent to year-end, shows that collection has not stopped, but the increase in receivables should weigh heavily in the end-2025 liquidity assessment.

Key financial metrics are as follows. FY2025 and FY2024 are based on the FY2025 audited financial statements. FY2023 is based on the FY2024 audited financial statements used in the previous report.

Note: Not listed indicates items for which this report has not obtained figures on the same basis in the main table; it does not mean zero. Total bank borrowings and total bonds and sukuk are this report’s calculations combining current and non-current amounts.

The most important point in this table is not only the decline in FY2025 profit, but the simultaneous decline in operating cash flow and increase in government receivables. Subsidy and compensation income support PLN’s profit and loss account, but if their cash conversion is delayed, PLN has to rely on short-term borrowings and market funding on a standalone basis. PLN’s support-inclusive credit quality remains strong, but its standalone financials are sensitive to timing differences in policy implementation.

The financial conclusion is that FY2025 results are not a one-directional negative for PLN’s credit quality. Government subsidy and compensation income increased, and part of the compensation receivable was collected after year-end, confirming that the support channel is functioning. However, weaker operating cash flow and increases in government receivables and short-term bank borrowings show that the lag between recognition and cash conversion of compensation can pressure standalone credit quality. Bond investors should monitor government receivables, compensation receipts, short-term borrowings, and funding market access ahead of profit.

5. Structural Considerations for Bondholders

The most important mistake to avoid when assessing PLN bonds is confusing government support expectations with an explicit government guarantee. PLN is a state-owned power utility controlled by the Indonesian government, and support expectations are very strong given the indispensability of electricity supply. Fitch and Moody’s also rate PLN close to the sovereign on a support-inclusive basis. However, individual PLN bonds or PLN-guaranteed subsidiary bonds do not become direct claims on the Republic of Indonesia.

This report covers PLN’s issuer credit profile and the broader PLN group credit that includes bonds issued by subsidiaries such as Majapahit Holding B.V. and guaranteed by PLN. For bonds actually purchased by investors, it is necessary to confirm the issuer, guarantor, governing law, collateral, subordination, negative pledge, cross-default, acceleration, tax gross-up, and change-of-control provisions. Even where ratings are aligned with PLN’s rating, legal claims are determined by contract.

Government support channels should be separated into normal conditions, liquidity stress, and deep stress. Under normal conditions, support reaches PLN’s revenue and cash collection through the tariff framework, subsidies, and compensation. The fact that subsidy and compensation income reached Rp200.2 trillion in FY2025 shows that this channel is operating on a large scale. Under liquidity stress, payment of compensation receivables and access to state-owned banks, the domestic bond market, and the foreign-currency bond market become important. In deep stress, the key issues would be capital injections, government-guaranteed borrowings, regulatory changes, and tariff normalisation.

Notes to the FY2025 financial statements state that some of PLN’s bank borrowings are government-guaranteed. This is an important support factor, but should not be read as a comprehensive government guarantee of all debt or all bonds. For bondholders, it is necessary to distinguish whether an individual bond is issued by PLN itself or by a subsidiary such as Majapahit, whether it has a PLN guarantee, whether it has a government guarantee, and with which obligations it ranks pari passu.

The structural issues for bondholders are as follows.

Given this structure, PLN bonds are naturally treated as quasi-sovereign power utility bonds with support expectations close to those for the Indonesian sovereign. However, they are not sovereign bonds themselves. When PLN trades excessively tight to the sovereign, investors should confirm the presence or absence of an explicit guarantee, cash conversion of government receivables, the increase in short-term borrowings, and Moody’s Negative outlook. Conversely, when PLN trades excessively wide to the sovereign, its irreplaceability, track record of subsidies and compensation, international market access, and Fitch’s Stable support-inclusive assessment provide useful reference points for reviewing support expectations.

6. Capital Structure, Liquidity and Funding

PLN’s liquidity cannot be assessed by cash on hand alone. Cash and cash equivalents at end-2025 were Rp42.2 trillion, below short-term bank borrowings of Rp58.3 trillion. Current bonds and sukuk were small at Rp1.53 trillion, but total current liabilities were Rp204.0 trillion, meaning PLN is not structured to absorb current liabilities using cash alone. Operating cash flow also declined to Rp9.92 trillion in FY2025. Therefore, the substance of liquidity is built on a combination of government receivable collection, bank lines, market funding, continued subsidies and compensation payments, and government-related credit.

The increase in short-term bank borrowings in FY2025 is important. Short-term bank borrowings increased from Rp21.8 trillion at end-2024 to Rp58.3 trillion at end-2025. Total bank borrowings also increased from Rp157.2 trillion to Rp211.8 trillion. This indicates a greater need to cover short-term funding requirements amid higher government receivables and weaker operating cash flow. Bonds and sukuk were broadly flat at Rp195.8 trillion in aggregate across current and non-current maturities, but given the USD1.5 billion GMTN issuance in February 2026, market funding remains an important funding source.

Unused borrowing facilities were disclosed at Rp11.3 trillion equivalent at end-2025. This is a supplementary liquidity buffer, but relative to the scale of cash, short-term bank borrowings, government receivables, and investment requirements, it does not on its own indicate sufficient safety margin. Notes to the financial statements present management’s view that the PLN group has no liquidity issue, based on sufficient standby credit facilities, government guarantees for repayment of related debt, and government subsidy income for electricity supply. This language itself indicates that PLN’s liquidity depends on government, bank, and market access.

The February 2026 GMTN issuance has two meanings. First, it confirms that PLN retains access to the international bond market. Even with weak operating cash flow in the FY2025 results, the market’s continued acceptance of PLN’s government-related credit supports liquidity. Second, it shows that funding needs are substantial and that foreign-currency funding and refinancing management will remain ongoing issues. Foreign-currency debt is affected by USD rates, FX, hedging, and the Indonesian sovereign outlook, so the fact that issuance was completed does not eliminate the risk.

The main liquidity and capital structure items are as follows.

The liquidity conclusion is that PLN is not an issuer that is safe because it has a large cash balance. Rather, it is an issuer whose liquidity is manageable as long as government receivables are collected, subsidy and compensation payments continue, and market access and bank borrowings remain available. Government support expectations and the indispensability of electricity supply support funding, but if government receivables increase further, compensation cash receipts are delayed, and short-term bank borrowings continue to rise, pressure on standalone financials and spreads would intensify.

7. Rating Agency View

PLN’s ratings incorporate not only standalone credit quality, but also substantial government support. On 2026-01-14, Fitch affirmed PLN’s long-term foreign-currency and local-currency issuer ratings at BBB / Stable. Fitch also rates PLN’s medium-term note programme, notes under the programme, and USD bonds issued by Majapahit Holding B.V. and guaranteed by PLN at BBB. This rating strongly reflects PLN’s indispensability in electricity supply and support expectations as a government-related issuer.

On 2026-02-06, Moody’s affirmed PLN’s issuer rating and senior unsecured rating at Baa2 and changed the outlook from Stable to Negative. Moody’s assigns PLN a BCA of ba2 and incorporates uplift from government support. The outlook change was linked less to a sudden deterioration in PLN itself than to the 2026-02-05 change in the Indonesian government’s Baa2 rating outlook to Negative.

Ratings do not create credit strength. Rating agency views should be used as third-party assessments for checking PLN’s government support expectations, standalone financial constraints, market access, and sovereign linkage. In PLN’s case, Fitch’s Stable outlook and Moody’s Negative outlook coexist, so investors need to distinguish not only whether PLN itself is strong or weak, but also the sovereign support outlook, predictability of government policy, and effectiveness of subsidy and compensation payments.

Moody’s downgrade triggers are useful for PLN analysis. The risks cited include a sovereign downgrade, weakening government willingness to support PLN, partial privatisation, a significant cut in government subsidies, delayed receipt of compensation, and debt-funded spending above expectations that causes CFO pre-working capital / debt to remain below 6%. Given the increase in compensation receivables and decline in operating cash flow in the FY2025 results, Moody’s monitoring axes have become more important.

Fitch’s assessment, in contrast, indicates an approach of rating PLN at the same level as the government. This indicates a strong floor for support-inclusive credit quality, but it does not mean that investors can skip confirmation of government guarantees on individual bonds. Rating level and legal claim are separate issues, and individual bond investments require review of prospectus terms on guarantees, ranking, and covenants.

The main rating-related monitoring points are as follows.

Based on public information confirmed as of 2026-06-05, Fitch’s January 2026 affirmation and Moody’s February 2026 outlook change are the most recent major rating actions for PLN. The latest S&P rating action on PLN has not been confirmed as of this report and remains in the unverified items in Sources.

8. Credit Positioning

PLN is one of the most policy-important issuers within the Indonesian quasi-sovereign universe. Compared with SMI, which is a policy finance issuer close to the Ministry of Finance, PLN is an operational national infrastructure company responsible for daily electricity supply. Compared with Pertamina, both companies are core to energy security, but PLN’s dependence on tariffs, subsidies, and compensation mechanisms is more direct, while its investment burden is tied for a long period to generation, transmission and distribution, IPPs, and the energy transition.

Even compared with state-owned infrastructure and resource issuers such as Pelindo or MIND ID, PLN’s support expectations are strong because of its immediate impact on daily life. At the same time, its revenue autonomy is low. Ports and mining are affected by regulation and policy, but tariff freezes and the cash conversion of compensation do not appear in their financials as directly as they do for PLN. Precisely because PLN’s support expectations are strong, the market tends to view it near the sovereign, but standalone cash generation is sensitive to policy decisions.

Compared with private-sector utilities, it is insufficient to treat PLN simply as a regulated utility. For a private-sector utility, credit assessment typically centres on the independent regulator, regulated asset base, allowed return, tariff-reset formula, and automatic fuel cost adjustment. PLN has an institutional tariff adjustment mechanism, but tariffs can be frozen for political and social reasons, with a large support channel in which the shortfall is filled by subsidies and compensation. Therefore, investors need to look not only at tariff framework predictability, but also at the government budget and payment timing.

On relative value, this report does not obtain current spreads or trading prices, so the positioning is limited to a qualitative view. When PLN trades extremely close to the Indonesian sovereign, investors should check that the bonds are not explicitly government-guaranteed, Moody’s Negative outlook, the increase in government receivables, and the increase in short-term bank borrowings. Conversely, when PLN trades excessively wide to the sovereign, Fitch’s Stable support-inclusive assessment, the track record of government support, indispensable electricity supply, and confirmed market access through the 2026 GMTN issuance provide reference points for reassessing support expectations.

PLN’s positioning within the quasi-sovereign universe is as follows.

9. Key Credit Strengths and Constraints

PLN’s first credit strength is the difficulty of replacing its role in electricity supply. It supports electricity supply across Indonesia, and the government has a very strong incentive to maintain PLN’s credit standing. If PLN’s function became unstable, the impact would spread widely across households, industry, investment, inflation, and political stability. This indispensability is the most important foundation of support-inclusive credit quality.

The second strength is the track record of government subsidies and compensation. In FY2025, PLN recognised government electricity subsidies of Rp87.5 trillion and compensation income of Rp112.7 trillion. Subsequent to year-end, it also received Rp27.1 trillion as part of the FY2025 compensation receivable. This shows that an institutional channel exists through which the government actually offsets tariff freezes and increases in supply costs.

The third strength is market access. PLN’s ability to issue USD1.5 billion of GMTNs in February 2026 shows that international investors continue to accept PLN’s support-inclusive credit. Domestic and international bonds, bank borrowings, government-related credit, and third-party rating agency assessments are all relevant confirmation points when considering PLN’s investment plan and refinancing.

The largest constraint, however, is that standalone financials depend on policy implementation. In FY2025, despite higher total revenue, profit for the year fell to Rp7.26 trillion and operating cash flow was only Rp9.92 trillion. Government receivables increased to Rp110.7 trillion. Even when subsidies and compensation are recognised, if cash conversion is delayed, PLN has to rely on short-term borrowings and market funding.

The second constraint is the heavy cost structure. Fuel and lubricants expense plus purchased power expense totalled Rp393.8 trillion, equivalent to roughly two-thirds of total revenue. FX losses and finance costs are also heavy. If fuel prices rise, the rupiah weakens, foreign-currency interest rates increase, and tariffs are frozen at the same time, PLN’s profit and cash flow can come under pressure quickly.

The third constraint is capex and the energy transition. The government has formally launched RUPTL 2025-2034, setting out a plan to add 69.5GW of power generation capacity over ten years, of which renewable energy and storage account for 52.9GW. This is important in the long term for electricity supply and transition-risk management, but in the short to medium term it could increase funding needs through capex, borrowings, foreign-currency funding, transmission and distribution investment, and IPP contracts.

The strengths and constraints can be summarised as follows.

PLN’s credit quality is built on the simultaneous presence of these strengths and constraints. On a support-inclusive basis, it is a strong quasi-sovereign credit, but viewed only on standalone financials, it depends heavily on policy, tariffs, compensation, and market access. Investors need to avoid treating PLN as the sovereign itself and should continue to confirm through which channel, at what timing, and to which debt obligations government support applies.

10. Downside Scenarios and Monitoring Triggers

The first downside scenario is a further delay in the cash conversion of compensation and subsidies. Government receivables had increased to Rp110.7 trillion by end-2025. Although part was collected after year-end, if the receivable balance remains high and cash receipts for compensation continue to fall well below the recognised amount, PLN would become more dependent on short-term bank borrowings and the bond market. This would affect not only standalone credit quality, but also how investors view the effectiveness of government support.

The second scenario is simultaneous deterioration in fuel prices, purchased power costs, FX, and interest rates. In FY2025, fuel and lubricants expense plus purchased power expense totalled Rp393.8 trillion, and FX losses increased to Rp12.5 trillion. If rupiah depreciation and fuel price increases occur at the same time and tariffs are frozen, the required compensation amount and government receivables would be likely to increase further. Until compensation is converted into cash, PLN would first bear the funding burden.

The third scenario is an increase in debt dependence for capex. RUPTL 2025-2034 is necessary for electricity supply and the energy transition, but the scale of capex is large. If investment in renewables, storage, transmission and distribution, gas-fired power, and low-emission coal-fired power proceeds faster than compensation payments or capital injections, additional debt and foreign-currency funding would increase. Moody’s CFO/debt-related downgrade trigger is important when assessing this investment burden.

The fourth scenario is a deterioration in the sovereign rating or government support expectations. Moody’s changed the Indonesian sovereign outlook to Negative and changed PLN’s outlook to Negative accordingly. Even if PLN’s standalone business remains stable, concerns over the sovereign rating, policy credibility, fiscal discipline, and subsidy budgets could affect PLN’s foreign-currency bond spreads.

The fifth scenario is that individual bond contractual protection is weaker than investors assume. Even with strong support expectations for PLN, points such as the absence of a government guarantee on individual bonds, limited cross-default language, weak change-of-control protection, collateral, or structural subordination can affect recovery prospects. This cannot be completed at the issuer report level and must be confirmed in the prospectus before investing in individual bonds.

The main monitoring items are as follows.

The combination investors should watch most quickly is government receivables, compensation cash receipts, short-term bank borrowings, USD/IDR, and fuel and purchased power costs. If these deteriorate at the same time, PLN’s standalone financials could come under pressure relatively quickly. Government support expectations are strong, but the time lag before support arrives as cash is likely to be reflected in spreads.

11. Credit View and Monitoring Focus

PLN’s current credit quality remains at a strong quasi-sovereign level near the Indonesian sovereign on a support-inclusive basis. At the same time, the FY2025 results show a somewhat weaker direction for standalone financials. The pace of change is more likely to appear as a gradual erosion of standalone headroom through compensation cash-conversion lags, higher short-term borrowings, and investment burden, rather than a sudden credit deterioration. The probability of abrupt change is not high under normal conditions, but if sovereign rating deterioration, compensation payment delays, and sudden disruption in the foreign-currency market coincide, foreign-currency bond spreads could react quickly.

The strongest basis for support-inclusive credit quality is PLN’s irreplaceable electricity supply function. The government has a very strong incentive to support PLN’s credit standing, and subsidy and compensation income was recognised in large amounts again in FY2025. The post-year-end partial payment of compensation receivables and PLN’s ability to issue USD1.5 billion of GMTNs in February 2026 also indicate that the support channel and market access remain functional.

However, the FY2025 results clearly show that PLN’s standalone financials depend heavily on timing differences in policy implementation. Total revenue increased, but profit for the year fell sharply and operating cash flow became thin. Government receivables increased to Rp110.7 trillion, and short-term bank borrowings also increased. This shows that while the subsidy and compensation framework supports PLN, delays in cash conversion shift the burden onto short-term funding.

For bond investors, PLN is an investable quasi-sovereign credit, but not an issuer where monitoring can be relaxed. Investment decisions should give credit for PLN’s proximity to the Indonesian government while clearly distinguishing the fact that individual bonds are not direct government obligations. When PLN trades excessively tight to the sovereign, caution is warranted because of government receivables, compensation receipts, short-term borrowings, RUPTL investment, and Moody’s Negative outlook. When PLN trades excessively wide to the sovereign, the indispensability of electricity supply, the track record of government subsidies and compensation, Fitch’s Stable support-inclusive assessment, and international market access provide confirmation points for support expectations.

There are four monitoring priorities ahead. First, how much of the government receivables are converted into cash in 2026. Second, how much budgetary provision is secured for subsidies and compensation if tariff freezes continue. Third, how much of the investment under RUPTL 2025-2034 is financed with debt. Fourth, how the Indonesian sovereign rating and policy credibility feed through into PLN’s access to the foreign-currency bond market.

12. Short Summary & Conclusion

PLN is an irreplaceable state-owned power utility responsible for nationwide electricity supply in Indonesia, and its support-inclusive credit profile remains a strong quasi-sovereign credit. In the FY2025 audited results, despite higher revenue, profit and operating cash flow weakened, while government receivables and short-term bank borrowings increased. Standalone financial headroom therefore depends more heavily on the cash conversion of policy compensation. Investors should not treat PLN bonds as sovereign bonds themselves, and should continue to monitor government subsidy and compensation payments, short-term borrowings, RUPTL investment, and the sovereign rating outlook.

13. Sources

Primary sources and official materials

• PT PLN (Persero), Consolidated Financial Statements as at December 31, 2025 and 2024, audited. Audit report dated 2026-05-19. Obtained from PLN’s official Financial Information page on 2026-06-05. URL: https://www.pln.co.id/webapi/media/file/webkorp/asset/4171c1f0-0e72-4f7b-a974-bbf97ab16d02.pdf
• PT PLN Financial Information page, confirmed on 2026-06-05. URL: https://www.pln.co.id/investor-relations-en/company-update-en/financial-information-en
• PT PLN (Persero), Consolidated Financial Statements as at December 31, 2024 and 2023, audited. Used for prior-year comparisons and key FY2023 table items.
• PT PLN (Persero), Interim Consolidated Financial Statements as at June 30, 2025 and December 31, 2024. Referenced as the interim-period comparison material used in the previous report.
• PT PLN official press release, RUPTL 2025-2034, 2025-05-28. URL: https://web.pln.co.id/cms/media/siaran-pers/2025/05/tingkatkan-bauran-ebt-hingga-2034-pln-siap-jalankan-ruptl-terhijau-sepanjang-sejarah/
• PT PLN RUPTL page, confirmed on 2026-06-05. URL: https://web.pln.co.id/bki/ruptl
• PT PLN electricity tariff page and related official tariff Q&A pages, confirmed on 2026-05-07. Used to confirm tariff categories and tariff adjustment.
• ESDM official tariff press releases for 2025. Used to confirm discretion in tariff setting and quarterly tariff decisions.
• Official source extraction data: issuer_summary/issuers/pln/data/pln_fy2025_audited_key_facts_20260605.json

Rating and market-related sources

• Fitch / Petromindo, "Fitch Affirms Indonesia's Perusahaan Listrik Negara at 'BBB'; Outlook Stable", 2026-01-14.
• Fitch / Petromindo, proposed PLN USD notes BBB, 2026-01-26.
• Moody's / Petromindo, "Moody's Ratings revises PLN's outlook to negative following change in sovereign outlook", 2026-02-06.
• Bank Indonesia page referencing Moody's 2026-02-05 Indonesia sovereign outlook change.

Supplementary sources

• SWA.co.id, "PLN (PPLN) Sampaikan Laporan Keuangan 2025, Laba Bersih Susut 66,86%", 2026-05-22. Used only as supplementary evidence that FY2025 audited financial statements were available via IDX disclosure on 2026-05-22.
• Indonesian financial media reports on PLN FY2025 results, including Warta Ekonomi. Used only for background confirmation; core financial figures are sourced from the official audited financial statements.

Unverified / Pending

1. The exact time at which the FY2025 audited financial statements were posted on PLN’s official website could not be confirmed from the PDF or HTTP metadata. This report treats 2026-05-22, based on secondary reporting referencing IDX disclosure, as the event date, and 2026-06-05 as the confirmation date on PLN’s official page.
2. If there is a FY2025 annual report separate from the audited financial statements, it has not been reflected in this report.
3. RUPTL 2025-2034 has been referenced within the scope of PLN’s official materials and press release. Further investment analysis would require confirmation of the full document and investment schedule.
4. For PLN bonds and Majapahit bonds, the individual prospectuses need to be checked for explicit government guarantee, PLN guarantee, negative pledge, cross-default, change of control, tax gross-up, governing law, and acceleration provisions.
5. The latest S&P PLN-specific rating action has not been confirmed in this update.