Financial Feasibility and Investment Risk Analysis for the High-Voltage Connection Project of PT Mitra Murni Perkasa (MMP) in Balikpapan

Abstract

This research aims to analyze the financial feasibility and investment risk of PT Mitra Murni Perkasa’s (MMP) high-voltage connection project in Balikpapan. The project entails the construction of a 4.68 km, 150 kV High-Voltage Overhead Transmission Line (SUTT) supported by nine towers, designed to supply 140 MVA of electricity in accordance with the 2022 Power Purchase Agreement (SPJBTL). The analysis employed both deterministic and Monte Carlo simulation approaches to account for uncertainties in input variables, such as investment costs (including construction labor), operations and maintenance (O&M) labor costs, non-labor operating costs, effective electricity tariffs, and the discount rate. Deterministic analysis results indicate a total investment of IDR 59.9 billion, a positive NPV of IDR 36.3 billion, an IRR of 19.4% (exceeding the WACC of 10.5%), a payback period of 4.9 years, and a Benefit-Cost Ratio (BCR) of 1.61. Monte Carlo simulations (10,000 iterations) yielded mean values of IDR 108.3 billion for NPV, 33.7% for IRR, 3.0 years for the payback period, and 2.8 for the BCR. The probabilities of NPV > 0, IRR > WACC, payback period < 15 years, and BCR > 1 all reached 100%, demonstrating a very high level of confidence in the project's feasibility. WACC, effective electricity tariffs, and load factor were identified as key risk factors, with Spearman correlation coefficients of -0.71, 0.45, and 0.39, respectively; conversely, labor costs (construction and O&M) had a relatively minor impact, with correlation coefficients below 0.1.