TABLE OF CONTENTS

1 ABBREVIATIONS 1

2 PREAMBLE 3

3 NATIONAL ENERGY REGULATORY FRAMEWORK 4

4 FINANCIAL INCENTIVES REGULATORY FRAMEWORK 5

5 MINI HYDRO POWER 8

6 GEOTHERMAL 10

7 BIOMASS & BIOGAS 13

8 BIOFUEL 15

9 LARGE HYDRO 17

10 ENERGY EFFICIENCY 19

11 ELECTRICITY ACCESS 20
Pembangkit Listrik Tenaga Surya di Bangli, Bali.
 ABBREVIATIONS

• Biodiesel (B108) is a Fatty Acid Methyl Esther (FAME) or Mono Alkyl Esther
product generated from plant materials and other biomass processed using
esterification method

• Bioethanol (E100) is a ethanol product generated from plant materials and

other biomass processed using biotechnological method

• Biofuel as other means of fuel is a type of fuel generated from plant materials
and/or other organic materials, which categorized as other fuel

• Biogas is a kind of gas, which is generated as an end product of anaerobic

biomass digestion by microorganism inside digester tank with methane 40% to
70% as main component and carbon dioxide

• Biogas Power plant is a type of power plant that generates electricity by

harnessing biogas energy.

• Biomass Power plant is a type of power plant that generate electricity by

harnessing biomass energy

• COD (Commercial Operation Date) - is the running date of power plant to

provide electricity to electrical system owned by PLN

• DJK (Direktorat Jenderal Ketenagalistrikan) - is a state agency conducting duty

an responsible for formulation and implementation of policies and also
technical standardization in the electrical power sector

• Electricity Supply License (Izin Usaha Penyediaan Tenaga Listrik/IUPTL) - is a

license to conduct business in supplying electricity for the public interest

• Energy Management is integrated activities to control energy consumption in

order to achieve effective and efficient utilization of energy to produce
maximum output through economical and structured technical measures to
minimized utilization of energy including energy for production process and
minimized raw and supporting materials

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY 1

 • EBTKE (Direktorat Jenderal Energi Baru Terbarukan dan Konservasi Energi) - is
a state agency conducting duty an responsible for formulation and
implementation of policies and also technical standardization in the new and
renewable energy and energy conservation sector

• Geothermal is heat based energy source contained in hot water, steam, and
rocks along with associated mineral and other gasses genetically inseparable
inside geothermal

• Geothermal license is a license for indirect geothermal exploitation in a

specific work area

• Geothermal power plant is a type of power plant that generate electricity by

harnessing geothermal power

• WKP (Wilayah Kerja Pertambangan) - is work areas with coordinative

boundaries utilized for indirect geothermal exploitation

• Hydropower Plant is a type of power plant that generate electricity by

harnessing the power of waters stream, waterfalls, dam, or multi purpose
irrigation channels

• MEMR - is Ministry of Energy and Mineral Resources

• Micro hydro power plant is small scale power plant with less than 1 MW of
capacity which may originate from irrigation channels, rivers, and natural
waterfalls

• PLN (Perusahaan Listrik Negara) - is a state owned company established

based on government regulation no. 23/1994 on the re-enactment of state
electricity public company to limited company

• PPA (Power Purchase Agreement) - is trade agreement on electricity between

holder of electricity supply license and PLN.

• Pure Vegetable oil (B100) is a product generated from plant materials

processed using mechanical and fermentative method.

• Solar Photovoltaic Power Plant is a type of power plant that generates

electricity by converting solar energy to electricity using photovoltaic module.

• Wind Power Plant is a type of power plant that generates electricity by

harnessing wind power.

2 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 PREAMBLE

There are ranges of policies and regulations

that govern the behavior of the energy sector
and significantly impact the decisions of
producers, consumers, investors and other
stakeholders. These policies and regulations
continue to be reviewed and, in the case of
new and renewable energy, continue to be
developed to address the specific
requirements of this emerging source of clean
energy.

As with policy makers who need accurate and

up-to-date information on the factors that
influence the decision-making process of the
private sector, investors need to be kept
informed about changes to policies and
regulations. It is in this latter context that this
document has been prepared and, in order to
support the changes underway for the
clean-energy sector, these guidelines will
continue to be improved and updated on a
regular basis.

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY 3

 NATIONAL ENERGY REGULATORY FRAMEWORK

Regulation Description Key Points Link

• Governs prioritization of new
renewable energy (NRE) and energy
efficiency (EE) by government and
local government
• Provides incentives and disincentives
http://www.dpr.go.id/dokjdih
for EE and NRE /document/uu/UU_2007_30.pdf
UU 30/2007 Energy • Establishes energy prices based on (accessible per 28 July 2015)

market mechanism with subsidies

still provided for low income groups
• Establishment of National Energy
Council
• Development of National and
Regional Energy Plans
• Ratio Electrification rate to reach
100% by 2020
• National Energy Mix (23% renewable
energy, 22% gas, 25% oil, 30% coal)
http://www.den.go.id/upload
by 2025 /ken/ppken.pdf (accessible per
National 28 July 2015)
PP 79/2014 Energy • National Energy Mix (31% renewable
Policy energy, 24% gas, 20% oil, 25% coal)
by 2050
• Decrease Final Energy Intensity by
1% each year till 2025

Maximizing renewable energy, minimizing use of oil, optimizing use of gas

and new energy; and use of coal for domestic purposes.

Strengthening financial policy instruments. Decentralized sources of

electricity. Bottom up approach. Data Governance. Connecting the
research sector with industrial sector. Capacity building.

4 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 FINANCIAL INCENTIVES REGULATORY FRAMEWORK
Regulation Description Key Points Link
• GoI Support to PPP projects includes
PP 67/2005 non-fiscal and fiscal supports
PPP in • Non fiscal support includes licensing, http://www.sjdih.kemenkeu.go.id
as amended Infrastructure /fullText/2011/56TAHUN2011PE
by PP land provision, partial construction
Provision support and RPRES.htm (accessed 2 July 2015)
56/2011
• Fiscal support includes tax incentives
and/or fiscal contribution

• GoI provides guarantee for PT PLN’s

financial obligation under default
and/or termination risk based on the
PPA with IPP
• BVGL may be given to the following http://www.sjdih.kemenkeu.go.id
PerMen Keu Business phase: /fulltext/2013/225~PMK.011~2013
225/PMK.011/ Viability a during project preparation phase Per.HTM (accessed 2 July 2015)
2013 Guarantee b during project construction phase
Letter (BVGL) c partial or the entire project
operation phase

• GoI provides fiscal support to

enhance the financial viability but
economically viable PPP projects
• As capital expenditure in the form of
cash for a certain portion of the
construction cost of the PPP project
• Requirements for VGF eligibility:
a economically viable yet has not
met financial viability http://www.sjdih.kemenkeu.go.i
PerMen Keu Viability Gap b the project is a users pay principle d/fullText/2012/223~PMK.011~20
223/PMK.011/ Fund (VGF) project
12Per.HTM (accessed 2 July 2015)
2012 c investment value of IDR 100
billion
d the project is operated by PPP
business unit based on open and
competitive tender
e PPP agreement as the basis for
asset transfer
f Feasibility study

• Income tax facility for certain line of

PP 18 of 2015 Tax Allowance
• Reduction of net income of 30%
business including NRE industry with
overall requirements:
a high value investment
b high absorption of manpower http://www.jdih.kemenkeu.go.id
c high local content in its products /fullText/2015/18TAHUN2015PP
.pdf (accessed 2 July 2015)
(thirty percent) of the investment in
the form of fixed assets, charged for
6 (six) years respectively at 5% (five
percent) each year as of the
Commercial Operation Date

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY 5

 Regulation Description Key Points Link

• Accelerated depreciation and

amortization.
• Imposition of income tax on dividends
which paid to foreign tax subject
• Compensation losses longer than 5
(five) years but not more than 10 (ten)
years with the certain conditions

• Exemption from import duty on the

PerMen Keu
import of machines, goods and
76/PMK.011/
materials for production for a period
2012 http://www.bkpm.go.id/img/
of 2 years. file/PMK%20No_%2076%
as amended
Import Duty • Import duty facility for a period of 4 20tahun%202012.pdf
by PerMen
Facility years is granted to a company using (accessed 28 July 2015)
Keu
locally-produced machines at least
176/PMK.011
30% of the total value of machines for
/2009
its production.
• Reduction of net income of 30%
(thirty percent) of the investment in
the form of fixed assets, charged for
6 (six) years respectively at 5% (five
percent) each year as of the
Commercial Operation Date
• Accelerated depreciation and
amortization.
PerMen Keu
• Imposition of income tax on
89/PMK.010 Tax Allowance
dividends which paid to foreign tax
/2015 subject of 10% (ten percent), or a
lower rate according to the http://www.sjdih.kemenkeu.
avoidance of double taxation go.id/fulltext/2015/89~
agreement. PMK.010~2015Per.pdf
• Compensation losses longer than 5 (accessed 2 July 2015)
(five) years but not more than 10 (ten)
years with the certain conditions (e.g.:
project location in industrial/bonded
zone, developing economic and/or
social infrastructure, minimum 70%
of local material/components,
deployment of local manpower, R&D
on local product development,
expanded business ventures, export)
• Income tax facilities:
a Reduction of net income of 30%
Tax and (thirty percent) of the investment
PerMen Keu Custom in the form of fixed assets,
http://www.sjdih.kemenkeu.
21/PMK.011/ Facilities for charged for 6 (six) years go.id/fullText/2010/21~PMK.
2010 Renewable respectively at 5% (five percent) 011~2010Per.HTM
Energy each year as of the Commercial (accessed 2 July 2015)
Activities Operation Date
b Accelerated depreciation and
amortization.

6 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 Regulation Description Key Points Link

c Imposition of income tax on

dividends which paid to foreign
tax subject
d Compensation losses longer than
5 (five) years but not more than 10
(ten) years with the certain
conditions
• VAT facility:
a. VAT free for importing Taxed
Goods (machineries and
equipment) for Renewable Energy
Import duty facility (as regulated
by Permenkeu 76/PMK.011/2012
and PMK 154/PMK.011/2008 as
amended by PMK 154/PMK.
011/2012
• Tax facilities borne by the GoI
• Free of Import Duty for power
generation industry:
a PT PLN (persero)
b Holder of Public Electricity
Business License (Izin Usaha
Import Duty Ketenagalistrikan untuk Kepen-
PMK Facility for tingan Umum/IUKU) which has
154/PMK.011 Importing business area
/2008 as Capital Goods c Holder of IUKU that has signed
PPA with PLN with 100%
amended by for the
purchasing commitment or signed
PMK Construction a Financial Lease Agreement with
128/PMK.011 and PT PLN (Persero)
/209 and Development • Requirement of Free Import Duty
PMK of Power Goods: http://www.sjdih.kemenkeu.go.id
154/PMK.011 Generation a Goods not yet produced /fulltext/2012/154~PMK.011~2012
Per.HTM (accessed 20 July 2015)
/2012 Industry for domestically
Public interest b Goods that are produced
domestically yet have not met the
required specification
c Goods that are produced
domestically yet have not met the
required quantities
*The Free Import Duty Goods must
be needed in the power
generation Industry
• A taxpayer can be granted a tax relief
facility for a period of between 5 and
PerMen Keu 10 years, starting from the
130/PMK.01 commencement of its commercial
1/2011 as production. http://www.bkpm.go.id/img/file/P
amended • After the expiration of the tax holiday, ERATURAN%20MENTERI%20KEUA
by PerMen Tax Holiday the taxpayer will be entitled to an
NGAN%20NOMOR.pdf (accessed 28
July 2015)
Keu income tax reduction of 50% for a
192/PMK.01 further 2 years.
1/2014 • Duration of the tax relief and
reduction can be extended based on
a decision by the Minister of Finance.

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY 7

 MINI HYDRO POWER
Regulatory Framework
Regulation Description Key Points Link
The purchase of
electricity from • Provides the latest pricing on
PerMen hydropower plants hydropower plants <10MW based
ESDM (hydropower) with on the water utilization (river or
multi-use facility such as irrigation http://ebtke.esdm.go.id/regul
19/2015 capacity up to 10 ation/8/peraturan.menteri
megawatts (MW ) canals) (accessed 25 July 2015)
by the State • Provide a way for some types of
E l e c t r i c i t y existing projects to get a price
Company ( PLN adjustment to this new tariff
Persero)
http://www.bkpm.go.id/img/PP
List of Business • Projects of less than 1 MW are
_No_39_2014.pdf (accessed 25
Fields Closed to closed to foreign investment. July 2015)
PerPres Investment and • Projects of between 1 and 10 MW http://www.bkpm.go.id/img/fil
39/2014 Business Fields are limited to a maximum 49% e/Peraturan/Bahan%20Perpres
%2039%20Tahun%202014%20da
Open, with foreign investment.
n%20Perbaikan%20Kemudahan%
Conditions, to 20Berusaha-ed.pdf (accessed 25
Investment July 2015)

• Governs the application process

• Guideline on for connection and the PJBL
KepDir PT process
connecting
PLN • Review and grid study content
renewable http://www.pln.co.id/dataweb
(PERSERO) • Specific processes for mini hydro /pjbl/Lampiran%20Pedoman%
energy based
0357.K/DIR (up to 10MW), waste to energy (up 20Penyambungan%20PLT%20E
power plants to BT%20ke%20JARDIS_final_sign
/2014 to 10MW), and Solar PV
PLN’s ed.pdf (accessed 28 July 2015)
distribution • KKO/KKF/K Risk
network • Technical requirements
• Testing and commissioning
procedures

Tariff – Referring to PerMen ESDM No 19/2015

Adjustment from the last
River flow ≤ 10 MW Dam existing ≤ 10 MW regulation EMR Ministerial
Decree Number 22 Year 2014
(Hydro Power ≤ 10 MW)

Medium Voltage (cent US$/kWh)
12 ( 1st year to 8th year)
7.5 ( 9th year to 20th year)
Low Voltage (cent US$/kWh)
14.4 ( 1st year to 8th year)
Medium Voltage (cent US$/kWh) Medium Voltage (cent US$/kWh)
10.8 ( 1st year to 8th year)
9.3
6.75 ( 9th year to 20th year)
Low Voltage cent US$/kWh) Low Voltage (cent US$/kWh)
13 ( 1st year to 8th year) 11

9 ( 9th year to 20th year) 8.1 (9th year to 20th year)

8 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 Investment Flow Chart

Regional
Investors & Lenders Government Developers Other Parties Central Government
Resource Assessment

Initial seed capital

*developers and Survey and site
investors could selection
also be in one
package
Prepare feasibility
study and
other technical
requirements

Apply for permits

PLN review &

Submit to PLN MEMR approves
acceptance
Development Rights

Apply for temproary

Process permit supply licence and
remaining permints. MEMR appoints
applications developers
Submit deposit
certificate to MEMR

MEMR issues
temporary supply
licences
Provide 6 month
progress report to
MEMR cc: PLN and DJK
Power Sales
Agreement

PLN & Developer PLN & Developers

finalize PPA finalize PPA

PLN provides
connection standards

Site Preparation and

contracts for
Project Construction

constructions

Financial close & issue permanent

Loans and/or apply supply
additional equity supply licences
permanent licences

Construct and
commission of plant
Operation and
Maintenance

Receive loan
repayment and Operate Plant Purchase Power
dividends

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY 9

 GEOTHERMAL
Regulatory Framework
Regulation Description Key Points Link

• Classified geothermal as a
non-mining activities
• Central government holds the prokum.esdm.go.id/uu/
UU No. authority for geothermal licensing. 2014/UU%2021%202014.pdf
Geothermal (accessed 25 July 2015)
21/2014
• Defines process for licensing and
pricing.
• Provide regulatory assurance for
developers
• Governments hold the authority to
determine geothermal prices.
PP
• Allow higher foreign shareholding
59/2007
limits for geothermal projects bumn.go.id/data/
as Geothermal uploads/files/1/59.pdf
amended Activities between 1 and 10 MW located in (accessed 25 July 2015)
by PP eastern Indonesia.
70/2010 • Oblige developers to provide
collaterals for post-production
activities.
Purchase of • Define ceiling prices determination
PerMen Electricity from http://esdm.go.id/regulasi/uu/
PLTP or method. doc_download/ 1484-peraturan-
ESDM Purchase of menteri-esdm-no16-tahun-
• Listed applied ceiling prices for
17/2014 Geothermal 2014.html (accessed 25 July
geothermal until 2025. 2015)
Steam for PLTP

Tariff – Referring to PerMen ESDM 17/2014

Ceiling Price (cent US$/kWh)
Year of COD
Region I Region II Region III
2015 11.8 17 25.4
2016 12.2 17.6 25.8
2017 12.6 18.2 26.2
2018 13 18.8 26.6
2019 13.4 19.4 27
2020 13.8 20 274
PLTP Kamojang - Garut

2021 14.2 20.6 27.8

2022 14.6 21.3 28.3
2023 15 21.9 28.7
2024 15.5 22.6 29.2
2025 15.9 23.3 29.6

Note:
• Region I: Sumatera, Java, Bali
• Region II: Sulawesi, Nusa Tenggara Barat, Nusa Tenggara Timur, Halmahera, Maluku, Papua, Papua Barat, and Kalimantan
• Region III: areas in region I & II that is isolated and most of the electricity generated is from diesel power plant

10 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

Investment Flow Chart - Preliminary Assignment

Investors & Lenders Regional Developers Other Parties Central Government

Government
Resource Assessment
Development Rights
Power Sales
Agreement
Project Construction
Operation and Maintenance

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY 11

Investment Flow Chart - Government Designated WKP

Investors & Lenders Regional Developers Other Parties Central Government

Resource Assessment

Government

MEMR complies
resource data

MEMR designates
WKP

Initial seedcapital MEMR conducts

Submit Proposal
tender
Development Rights

MEMR awards WKP

Exploration Applies for permits
funding

Process permit
application

Conducts exploration &

prepare feasibillity study
Power Sales

PLN and developers

Agreement

PLN and developers MEMR issues

finalize PPA finalize PPA supply license

Loans and/or
additional equity Financial Close
Project Construction

Field development,
power plant construction
and commisioning
Operation and Maintenance

Receive loan
repayment and Operate plant Purchase Power
dividends

Receive production
bonus

Receive production
bonus

12 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 BIOMASS & BIOGAS
Regulatory Framework
Regulation Description Key Points Link

Purchase of • Regulate assurance of electricity

Electricity from purchase by state owned
http://prokum.esdm.go.id/per
Biomass Power electricity company (PLN). men/2014/Permen%20ESDM%
• Regulate Feed in Tariff that must 2027%202014.pdf
PerMen plant (PLTBm) and (accessed 25 July 2015)
ESDM Biogas Power be complied by PLN for electricity
27/2014 Generation generated by biomass and biogas
(PLTBg) by PT power plant less than 10 MW
PLN (Persero). • Defines process for permit
licensing

List of Business
Fields Closed to http://www.bpn.go.id/Publika
• Projects of less than 1 MW are si/Peraturan-Perundangan/Pe
Investment and closed to foreign investment. raturan-Presiden/peraturan-pr
PerPres Business Fields esiden-republik-indonesia-no
• Projects of between 1 and 10 MW mor-39-tahun-2014-4594
39/2014 Open, with are limited to a maximum 49% (accessed 25 July 2015)
Conditions, to foreign investment.
Investment

• Governs the application process

for connection and the PJBL
Guideline on
KepDir PT process
connecting
PLN • Review and grid study content http://www.pln.co.id/dataweb
renewable energy /pjbl/Lampiran%20Pedoman%
(PERSERO) • Specific processes for mini hydro 20Penyambungan%20PLT%20
based power
0357.K/DIR (up to 10MW), waste to energy (up EBT%20ke%20JARDIS_final_sig
plants to PLN’s ned.pdf (accessed 28 July
/2014 to 10MW), and Solar PV 2015)
distribution
• KKO/KKF/K Risk
network
• Technical requirements
• Testing and commissioning
procedures

Tariff – Referring to PerMen ESDM 27/2014

PLT Biogas (POME)

: Rp. 1.150/kWh: Medium Voltage

Biomass

Rp. 1.500/kWh: Low Voltage

Biogas: Rp.1.050/kWh: Medium Voltage

Rp. 1.400/kWh: Low Voltage

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

13
 Investment Flow Chart – (< 10 MW)

Investors & Lenders Regional Developers Other Parties Central Government

Resource Assessment

Government
Development Rights
Power Sales
Agreement
Project Construction
Operation and
Maintenance

Detail biomass & biogas investment guideline

• http://ebtke.esdm.go.id/post/2014/09/05/664/renewable.energy.guidelines.on.biomass-
biogas.development.in.indonesia (accessed 28 July 2015)

14 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 BIOFUEL
Regulatory Framework
Regulation Description Key Points Link

• Obligation to mix biofuel into fuel

based in stages
• Prioritization in utilizing domestic
Provision, biofuel
PerPres http://www.jdih.kemenkeu.go.id/
191/2014 Distribution, and • Government of Indonesia guarantees fullText/2014/191TAHUN2014per
Retail Prices of the availability and distribution of pres.pdf (accessed 25 July 2015)
Fuel Oil Biofuel
• Index Market Price of Solar and Index
Market Price of Biofuel are stipulated
by the Minister

• Governs types of biofuel priorities for

Provision,
PerMen development http://prokum.esdm.go.id/perme
utilization and
ESDM • Defines process for licensing and n/2008/permen-esdm-32-2008.
administration pdf (accessed 25 July 2015)
32/2008 pricing.
Biofuel

Collection and • Collection and Utilization of Palm Oil

Utilization of Plantation Fund for biodiesel http://jdih.esdm.go.id/peraturan
PerPres Palm Oil implementation. /Perpres%20No.%2061%20Th%20
61/2015 Plantation Fund • Obligation for biofuel distribution 2015.pdf (accessed 25 July 2015)
enterprise to blend biodiesel
according to regulation.

The Provision, • Description of types of biofuel and on

Utilization, And which sector it is mandatory in. http://jdih.esdm.go.id/peraturan
PerMen /Permen%20ESDM%2012%20Thn
The Marketing %202015.pdf (accessed 25 July
ESDM • Timeframe and percentage for biofuel
Of Biofuels 2015)
12/2015 provision
(Biofuels) As
Other Fuels

PerMen Service Tariff of • Amount of export tax levies applied

Keu Public Service to CPO and its derivatives. http://www.jdih.kemenkeu.go.id/
114/PMK.05 Agency fullText/2015/114~PMK.05~2015P
• Amount of export tax levies applied er.pdf (accessed 25 July 2015)
/2015 to CPO-based biodiesel. Photo : Google

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

15
 Investment Flow Chart

Regional Other Parties Central Government

Investors & Lenders Developers
Resource Assessment

Government
Development Rights
Power Sales
Agreement
Project Construction
Operation and
Maintenance

16 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 LARGE HYDRO
Regulatory Framework
Regulation Description Key Points Link

Power for Power • Regulates IPP procurement

PerMen ESDM Purchase and/or http://prokum.esdm.go.id/perm
04/2007 as process consist of a) direct
lease of the network in appointment, b) direct
en/2007/permen-esdm-04-200
amended by the electricity supply 7.pdf (accessed 28 July 2015)
PerMen ESDM selection, and c) open tender
business for public
01/2006 interest • Regulates PPA negotiation
process

• Governs off-grid systems to

PP 14/2012 Electricity Supply
Business Activities
supply consumers.
• Defines process for licensing http://prokum.esdm.go.id/pp/20
and pricing. 12/PP%2014%202012.pdf
• Per Law No. 23 of 2014 on (accessed 25 July 2015)
Regional Government,
provincial government holds
the authority for licensing and
pricing of off-grid systems.

• Purchase by PLN can be done

by open tender, direct
PerMen Guidelines For The appointment or direct
ESDM Purchase Of Electricity selection. http://prokum.esdm.go.id/perme
05/2009 By PT. PLN • PLN develops its owner n/2009/permen-esdm-05-2009.
(Persero)Cooperation estimate based on several pdf (accessed 28 July 2015)
From Or Other standards a) local content, b)
Business Entities price and quality of fuel, c)
exchange rate and d) other
macro economy indicator.

Photo : Google

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

17
Investment Flow Chart

Investors & Lenders Regional Developers Other Parties Central Government

Resource Assessment

Government
Development Rights
Power Sales
Agreement
Project Construction
Operation and
Maintenance

Detailed IPP guideline

http://www.pln.co.id/dataweb/ipp/bookletipp.pdf (accessed 28 July 2015)

18 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

 ENERGY EFFICIENCY
Regulatory Framework

Regulation Description Key Points Link

• Governs responsibilities of
government, local governments,
private sectors, and the society in
energy conservation
• Regulate obligation to establish new
energy management system for
Energy users with consumption over http://aplikasi.ebtke.esdm.
PP go.id/pome/uploads/doc
70/2009 Conservation 6,000TOE /PP%2070%202009.pdf
• Regulate on standards and labeling. (accessed 25 July 2015)
• Provide facilitation, incentives and
disincentives for energy consumer
and producer of energy saving
technology
• Direction and supervision of energy
conservation

• Governs consumption savings for: http://aplikasi.ebtke.esdm.go.i

PerMen Energy
Government buildings, State d/popea/live/data/regulasi/1
ESDM Consumption 396494400.pdf
Enterprise buildings, Government
13/2012 Savings (accessed 25 July 2015)
officials’ residence, public lighting.

• Governs energy management and

http://jdih.den.go.id/downlo
PerMen Energy use for energy supply and utilization
ad/574/peraturan-menteri-e
ESDM Management in which the permits was given a sdm-no-142012 (accessed 25
14/2012 government body and/or an object July 2015)
of working agreement under a
government body.
PerMen Control of Oil http://jdih.esdm.go.id/peratu
• Governs use of subsidized fuel by ran/Permen%20ESDM%2001
ESDM Fuel Use Government-owned vehicles, and %202013.pdf (accessed 25
1/2013 July 2015)
transport vehicles of certain classes.

PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

19
 ELECTRICITY ACCESS
Regulatory Framework

Regulation Description Key Points Link

• Governs the development, utilization,

supply, and distribution of Electricity http://prokum.esdm.go.id/uu
UU /2009/UU%2030%202009.pdf
Electricity Defines delegation of authority
30/2009 (accessed 25 July 2015)
between relevant parties
• Regulates the management and
business of electricity
• Governs off-grid systems to supply
Electricity consumers.
Supply • Defines process for licensing and
PP 14/2012 Business http://prokum.esdm.go.id/pp/
pricing. 2012/PP%2014%202012.pdf
Activities • Per Law No. 23 of 2014 on Regional (accessed 25 July 2015)
Government, provincial government
holds the authority for licensing and
pricing of off-grid systems.
List of Business • Projects of less than 1 MW are closed
Fields Closed to foreign investment. http://www.gaikindo.or.id/wp-c
PerPres to Investment • Projects of between 1 and 10 MW are ontent/uploads/2015/05/PerPr
and Business limited to a maximum 49% foreign es-39_2014-lampiran-negative-li
39/2014
st.pdf (accessed 25 July 2015)
Fields Open, investment.
with Conditions,
to Investment
• Governs technicalities on how the
Technical specific funds available from the 2015
Guidance of national budget (APBN) can be
Utilization of utilized to fund
Specifically renewable-energy-based electrical
PerMen Allocated programs like Micro Hydro, Solar
Mini-grid, and Solar-Wind Hybrid for http://jdih.esdm.go.id/peratura
ESDM Funds in the n/Permen%20ESDM%2010%20T
10/2015 Field of village level needs. hn%202015.pdf (accessed 25
Electricity at • Aimed to provide reference for July 2015)
the Village Working Units at Local level on how
Level in the to tap the funds.
2015 National • Regulation specific line of
Budget. coordination, distribution of tasks and
responsibilities, and establish a
monitoring/supervising mechanism.
Photo : Google

20 PRACTICAL GUIDE TO INVESTMENT IN RENEWABLE ENERGY

Photo : Google
PLTP Patuha