Jakarta, January 30, 2025 – The Indonesian government through the Ministry of Energy and Mineral Resources (MEMR) stated that PT PLN is currently preparing the 2025-2034 Electricity Supply Business Plan (RUPTL). The Minister of MEMR, Bahlil Lahadalia, said that 60 percent of the renewable energy generation target will be handed over to the private sector through Independent Power Producers (IPPs).

In an interview with the Market Review IDX channel, the Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, said that the involvement of the private sector in increasing Indonesia’s renewable energy capacity is inevitable. However, there are several important notes that need to be considered, including the missed target for increasing renewable energy capacity and investment in Indonesia’s renewable energy in recent years.

“This (failure to achieve investment) must be an evaluation for the government. Currently, there is a precedent that renewable energy investment in Indonesia is less attractive compared to other countries in Southeast Asia such as the Philippines, Vietnam, Malaysia, Singapore, or Thailand,” said Fabby.

Fabby added that improving the investment climate is a must to encourage private participation in the development of renewable energy capacity. Fabby recommended a number of steps that the government can take to untangle the obstacles to renewable energy development in Indonesia.

First, fix all inhibiting regulations. Renewable energy tariffs in Presidential Regulation 112/2022 need to be reviewed to adjust to the current situation which is experiencing an increase in interest rates.

Second, increase PLN’s ability to conduct scheduled auctions and a faster and more efficient PPA process.

Third, improve PLN’s electricity tariffs to increase PLN’s financial liabilities. PLN’s financial liabilities are one of the considerations for investors in investing considering PLN’s current role as the single off-taker of electricity in Indonesia.