Investment and Finance 
for Indonesia’s  Coal-to-Green Transition

- Market Background in Indonesia:

  • Growth of electricity demand at pace of 4.5%-5.5%

  • Reduced reliance on fossil fuels, while pushing renewable energy as priority

  • National renewable energy capacity to reach 23% of overall energy mix by 2025, with solar and wind representing 6.5GW and1.8GW respectively


- PLN’ attitude towards renewable energy


  • Renewable energy as first priority under MEMER’s request

      There will be no big coal fired plants under pipeline nor equity injection plan

  • Re-introducing the Feed-in-Tariff program for projects below 10MW

      For projects larger than 10MW, it will be conducted in direct selection. Also the            PLN is considering tender in large bulk to boost investment interests


  • Projects lining in Sumatra, also the eastern part of Indonesia

      Economic growth in the two parts is high compared with Java, while the energy          demands are often underserved. Solar storage or hybrid projects are considered          with huge potential


  • Highlighting local partnership at the center of project development

     In consideration of land, law and permitting shall be prioritized in every project            development


  • Continue supports for local manufacturing growth whereas providing duty cuts to reduce LCOE

      Preferential duty cut policies to reduce LCOE cost caused by local content                    requirements



- General Opportunities on Renewable energy development


  • Encourage the utilization of the development of PV Rooftop

      Especially for the middle-income people


  • The increasing price of small-scale solar panel power plant and batteries which are suitable for remote area.


  • Potential development of smart grids and distributed generation in remote area and prioritizing the development of hybrid systems

     Thousands of islands in Indonesia are not being served by the national power              grid, so these islands are better to use distributed generation


  • Create potential customers especially the tourism industry with special tariffs in using NRE, Nike and some companies have intended to purchase the electricity with green certificate energy


- Challenges in Eyes of Developers and Financiers:


  • Unreputable and inexperienced sponsors

      The construction rate is very low, only less 20% are under construction


  • Some of the potential of NRE is in the conservation are