Politician appointed to lead PLN to support EV program
After replacing the performing CEO of state-owned mining holding company Mining Industry Indonesia (MIND ID), State-Owned Enterprises (SOEs) Minister Erick Thohir sacked the CEO of state-owned electricity company PT PLN despite his impressive financial improvements of the debt-ridden company. Sources said both replacements were part of the government’s zeal to pursue the faster adoption of electric vehicles (EV) in the country.
Erick dismissed Zulkifli Zaini as PLN CEO and replaced him with his deputy Darmawan Prasodjo, a politician from the ruling Indonesian Democratic Party of Struggle (PDI-P). Erick acknowledged that under the leadership of long-time banker Zulkifli, PLN managed to book higher revenue at Rp 345.4 trillion (US$24.2 billion) and a profit of Rp 5.99 trillion last year despite relatively low electricity demand during the pandemic. Zulkifli also lowered the company’s debt ratio to Rp 452.4 trillion. (See What’s more)
However, such achievements were not enough for Zulkifli to retain his position as PLN CEO. He is considered not bold enough to support the government’s drive for faster EV adoption. PLN, together with MIND ID, state-owned mining company PT Aneka Tambang and state-owned oil and gas holding Pertamina, are the shareholders of Indonesia Battery Holding (IBC), which is specially charged with initiating the end-to-end production of EV batteries by leveraging the country’s large reserves of nickel – the main component of lithium battery.
In October, Erich replaced MIND ID CEO Orias Petrus Moedak with Hendi Prio Santoso, former president director of state-owned cement producer PT Semen Indonesia despite MIND ID’s stellar performance under Orias’ leadership. MIND ID booked a soaring 800 percent increase in net profits to Rp 9.8 trillion in the first nine months of this year, up from a net loss of Rp 1.4 trillion in the same period of last year.1
The removal of Orias and Zulkifli from MIND ID and PLN is most likely related to the government’s EV program. Both Orias and Zulkifli reportedly disagreed with IBC’s plan to acquire German-based EV company StreetScooter GmbH, a subsidiary of Deutsche Post DHL Group. Pertamina’s chief commissioner Basuki “Ahok” Tjahaja Purnama also disagreed with IBC’s planned acquisition, saying “you cannot just give future valuation, what’s the base of your future valuation? This is a new venture.” But Deputy SOE Minister Pahala N. Mansury denied this, saying “[There is] no relation between the replacement of the director in PLN with the planned acquisition,”2
In addition to MIND ID and PLN, Erick is said to be reshuffling the boards of directors of other energy related SOEs, especially mining company PT Bukit Asam, PT Aneka Tambang (Antam) and PT Timah – all publicly-listed SOEs. Not only that, Erick is also said to be replacing Pertamina CEO Nicke Widyawati.3 Both Nicke and Zulkifli were recently reprimanded by President Joko “Jokowi” Widodo for their slow response to investment proposals and slow execution of strategic projects. The president also demanded the two companies accelerate their energy transition to new and renewable energy sources.4
Under Zulkifli’s leadership, PLN increased its total revenue to Rp 345.4 trillion and booked a net profit of Rp 5.99 trillion in 2020, a 39.3 percent increase from the previous year. The rising revenue and profits occurred even while electricity demand was slow because of the pandemic. Zulkifli also lowered the company’s debt ratio to Rp 452.4 trillion, with potential savings of Rp 25.9 trillion following successful negotiations with 14 private independent power producers over the commercial operation date (COD) of their power plants.5
In addition, under Zulkifli’s leadership, PLN managed to save its assets worth Rp 6.3 trillion last year by certifying 20,507 land plots. As of early December, this year, PLN certified a further 17,971 plots of land. Overall, PLN certified 62 percent of its total land assets, compared with the 31 percent certified at the end of 2019. For this, the Corruption Eradication Commission granted PLN an award for saving state assets. PLN targets to complete the certification of its land assets by 2023.6
PLN board of directors
President director Darmawan Prasodjo
Corporate Planning director Evy Haryadi
Business and Customer Management director Bob Saril
Finance and Risk Management director Sinthya Roesly
Human Resource Management director Yusuf Didi Setiarto
Primary Energy director Rudy Hendra Prastowo
Mega Project, New and Renewable Energy director Wiluyo Kusdwiharto
Sumatra and Kalimantan Regional Business director Adi Lumakso
Java, Madura and Bali Regional Business director Haryanto WS
Sulawesi, Maluku, Papua and Nusa Tenggara Business director Adi Priyanto
PLN board of commissioners
Independent and chief commissioner Amien Sunaryadi
Deputy chief commissioner Suahasil Nazara
Commissioner Muhamad Ikhsan
Commissioner Rida Mulyana
Commissioner Dudy Purwagandhi
Commissioner Eko Sulistyo
Commissioner Ardan Adiperdana
Commissioner Susiwijono Moegiarso
Independent commissioner Heru Winarko
Independent commissioner Alex Iskandar Munaf
A businessman in the electricity sector said rumors of Zulkifli Zaini’s dismissal from PLN’s president director position had begun circulating among electricity business players around the end of October. The hubbub surrounding Zulkifli’s removal had even spread earlier than that of Orias Petrus Moedak’s removal from his post as MIND ID’s president director.
As in Orias’ case, the replacement of PLN’s president director was triggered by Zulkifli’s opposition to the acquisition of Treetcooter, a German electric car manufacturer, by the Indonesia Battery Corporation. Both Zulkifli and Orias opposed the proposal of SOEs Minister Erick Thohir to finish the acquisition. In Zulkifli’s view, the acquisition was a mistake. That is why PLN, as part of IBC, refused the plan.
Jokowi’s wish that PLN and Pertamina prepare for the transition from fossil fuels to green energy served as an opportunity for Erick to sack Zulkifli. Jokowi’s request was extended to PLN and Pertamina’s commissioners and directors upon his return from the United Nations Climate Change Conference (COP26) in Scotland in late November. This was also the reason behind Zulkifli’s dismissal being wrapped up in PLN’s pressing assignment to execute an energy transition. Coincidentally, PLN has been deemed sluggish in developing renewable energy.
At first, Karakatau Steel president director Silmy Karim was cited as Zulkifli’s successor. However, Erick is said to not feel the click with Silmy because of his closeness to Health Minister Budi Gunadi Sadiki. Zulkifli’s appointment as PLN president director was inseparable from Budi, who was then the SOE Deputy Minister. Another source said Erick had been removing those close to Budi Gunadi Sadikin from directorial posts on SOEs.
Meanwhile, Darman Prasodjo’s appointment as Zulkifli’s successor was part of Erick’s move to satisfy the Indonesian Democratic Party of Struggle (PDI-P). Erick seems to know that he is being targeted by the PDI-P. There is a rumor that if Jokowi does reshuffle, the PDI-P will put forward North Sulawesi Governor Olly Dondokambey as SOEs minister.
Besides his closeness to Megawati Soekarnoputri, Darmawan is also a close colleague of Luhut Pandjaitan. Draman was proposed as a candidate for PLN president director at the end of 2019. However, Budi Gunadi and Sri Mulyani disagreed with the proposal. As a result, it was Zulkifli Zaini who was finally given the position.
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