2016 11 01 Webinar 1 1124.04

Renewable Energy Webinar
November 1st, 2016

Dr. Henry Loewendahl, CEO WAVTEQ
Mr. Scott Bryan, Executive Director Client Services, ROI
henry.loewendahl@wavteq.com
SBryan@researchoninvestment.com
Contents
• Introduction 3
• Solar sector 9
• Biomass sector 14
• Hydroelectricity sector 20
• Geothermal sector 24
• Wave & Tidal sector 29
• Indonesia’s competitiveness 31
• About BKPM 41
• Appendix 1: BKPM investor support 46
• Appendix 2: FDI regulations 53
• Appendix 3: Feed-in tariffs 59
Indonesia Investment Coordinating Board
Introduction

About Indonesia
Indonesia has the 4th Indonesia is one of the

largest population in the fastest growing economies
world (261 million as of in the world in the world
August 2016) (>5% p.a. 2012-16)
Indonesia’s GDP will Access to the $2.5 trillion

increase by over 150% ASEAN market with a
to $2.2 trillion by 2025 – population of 620 million
close to Canada’s
Canadian investment in Indonesia
invested by of Canadian investors of Canadian investors

Canadian firms in Indonesia are in Indonesia would
in Indonesia planning to recommend other
re-invest in Indonesia Canadian companies
(WAVTEQ, June 2016 survey) to invest in Indonesia
(WAVTEQ, June 2016 survey)
Renewables was the sector with the best
opportunities for FDI into Indonesia
according to Canadian investors.

Why invest in the energy sector?
Demand for energy
7.7% Up 60 gw of private
increase per annum power plants will be
through to 2020 approved by 2025
Track record
The government is
$10 billion targeting private sector
FDI in the energy related
sector in the last five
energy investment of $80
years (2011-15) billion by 2025
Demand for energy in Indonesia
• Energy consumption increased by almost 150% from 2005-2014
• Electricity generation is forecast to increase by >50% from 2015-2020
Final energy consumption, thousand barrel oil equivalent, Indonesia, 2005-2020
2500000
2000000
1500000
1000’s
1000000
500000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2005
2006
Source: WAVTEQ based on Ministry of Energy and Mineral Resources- Handbook of Energy and Economic Statistics 2015 and EIU

Support for renewable energy
Renewables
BKPM is targeting $100 billion of green
investment by 2019
The government meet has a target of 25%

of energy from renewable sources by 2025
In total, the Indonesian government has

proposed 508 power projects (conventional
and renewable) from 2015-19
Solar sector

Indonesia’s solar sector
Growth in Government support
solar investment
1.4 GW
$3.8 billion
national target installed solar
in solar energy projects targeted
from 2015 to 2025 photovoltaic capacity by 2025
Solar auction
An estimated US$3.8
90+ billion of investment
Solar PV / diesel hybrid projects will be required from
to be auctioned in 2018 2015 to 2025.
Solar investment potential in Indonesia
Solar photovoltaic capacity and electricity generation target, Indonesia, 2015-2025
Source: BKPM http://www.all-energy.co.uk/__novadocuments/81855?v=635646359979030000 –
Most of Indonesian receives high intensity of solar radiation,

with the average daily radiation about around 4 kWh/m.
As an archipelagic country, thousands of islands

do not have access to electricity (27% of the
population is still off the grid)
Planned solar projects
PLN’s Solar PV Development Program
Source PLN / Asian Development Bank 2015

Solar case studies
In January 2015, Canadian Solar Inc. (CSI) announced

a 30 mw solar manufacturing plant in Indonesia with
$70 million funding secured from the IFC.
At the end of 2015, construction was finished on

Indonesia’s largest Solar Power Plant in Kupang, Oelpuah
village. LEN Industri builds and operates the plant with its
own funding of approximately US$11.2 million
Biomass

Indonesia’s biomass sector
17.6% 5.0% 8.5% 71.2% 50000 MW
Of primary Of primary Of industrial Of household Biomass power
energy supply energy supply energy energy generation
from biomass from bio-fuel requirements requirements potential
from biomass from biomass

Biomass – energy supply
Primary energy supply of biomass, Indonesia, thousand BOE (2005-2014)
320000
310000
300000
290000
280000
270000
260000
250000
240000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: Ministry of Energy and Mineral Resources- Handbook of Energy and Economic Statistics 2015

Government support
25% $100 bn 508 Feed-in-tariff
Target of energy from Investment in Proposed power To encourage

renewable sources by green energy by projects from 2015 investment in
2025 2019 to 2019 renewable energy
Waste to energy Partnership Incentives
Strong focus by government Waste-to-Energy Strategic Policies,

to encourage use of waste scheme in partnership incentives and
from domestic, agriculture with organisations regulations to promote
and wood including EU use of solid waste from
municipalities

Case studies
Sinar Mas, through its subsidiary Asia Pulp
& Paper (APP), is investing around USD780
million to develop 10 biomass power plants
over the next eight years with a total
generating capacity of 1000 mw.
Louis Dreyfus Company has established a

bio-fuel plant in Lampung province in
Sumatra, with the capacity to produce
470,000 million tons of bio-fuel annually.
Biomass waste heat recovery firms

Hydroelectricity

Hydroelectricity
1. Potential for hydroelectricity
•Installed capacity is 5.9 GW
•Potential capacity is 75.6 GW
2. Growth in Hydroelectricity investment
•Indonesia is targeted 26 new hydro power plants
•11 hydro projects are in various stages of
appointment or construction
3. Government support for Hydroelectricity
•Feed-in tariffs have been introduced for
Hydroelectricity
•The government is targeting 8.3 GW of hydropower by
2024
Hydroelectricity consumption
Gross domestic energy consumption (KTOE)*, Indonesia, 2011-2020
2,000
1,800
1,600
1,641 1,683 1,726
1,400 1,556 1,599
1,456 1,479 1,522
1,200
1,000
1,068 1,101
800
600
400
200
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Economist Intelligence Unit Energy Indicators & Forecasts *Kilotonne of oil equivalent (KTOE)
Hydroelectricity case study
Vale Brazil)
• Responsible for the running of three hydroelectric power plants:
– Larona- operations commenced in 1979, consists of three turbines with
power capacity of 165 MW
– Balambano- consists of two turbines with power capacity of 110 MW and
operations began in 1999
– Kerebbe- newest of the three plants, began operations in 2011, with two
turbines and capacity of 90 MW
• Main use of this energy is to increase nickel production by
prioritizing cost efficiency
• Contributes 34% (10.7 MW) of their energy to Perusahaan Listrik
Negara (PLN), the state owned electricity distributor

Geothermal

Geothermal sector in Indonesia
1. Indonesia has exceptional volcanic activity and is
believed to harbour around 40% of the planet’s
geothermal potential, with estimated resources and
reserves totaling 28,000 megawatts (MW)
2. Sumatra holds most of these, followed by Java
3. Current government planning is to boost installed
capacity to 6500 MW by 2025, up from some 1340 MW
that were on stream in early 2014 (with projects for
another 1500 MW in development)
4. Unlike most other forms of electricity generation,
geothermal is dominated by IPPs (non-SOEs)
Geothermal sites
299 identified potential geothermal locations

Geothermal case studies

Wave and tidal

Wave and tidal energy
1. Indonesia has an ocean area reach out of 5,000,000 km2
2. This is biggest archipelago country in the world and has
great ocean energy potential
3. Ocean wave energy had the theoretical potency 510 GW,
the technical potency 2 GW, and the practical potency
1,2 GW (BPPT, 2014)
4. The Energy and Mineral Resources Ministry of Indonesia
has announced plans for the development of wave and
current power plants in the country
5. Pilot projects started in 2015

Wave and tidal energy case studies
Sabella, French tidal energy Akuo Energy and Pertamina
developer, signed an MOU have also signed an MoU for
with PLP and MEINDO to developing renewable energy
supply tidal turbines from projects, including OTEC plant,
100 kW to 2.500 kW in at various sites in Indonesia
capacity that would power
remote areas of Indonesia

Indonesia’s
competitive
position

Size of market
GDP 2011-2025, US$ billion (EIU forecasts)
2500
Indonesia’s GDP 2025 forecast:
• Increase >150% to $2.2 trillion Indonesia
2000 • Larger than India’s in 2015
• Nearly same size as Canada’s ($2.6 tn)
Philippines
• GDP/capita: $3370 (2015) to $7840
1500
Thailand
Malaysia
1000
Vietnam
500
Singapore
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Size of population
Population by country, 2015-2030
Indonesia 308
255
Philippines 128
101
Vietnam 103
92
Indonesia’s population is
70
Thailand 69 the 4th largest in the world
and will increase to over
36
Malaysia 31 300 million people
Singapore 7
6
0 50 100 150 200 250 300 350

Population projection (mid-2030, Millions) Population (2015, Millions)
Source: fDi Benchmark (IMF and Population Reference Bureau World Population Data Sheet)

Skilled workforce
Availability of Scientists and Engineers – out of 7 (2015)
Indonesia 4.6
China 4.5
Thailand 4.3
India 4.2
Philippines 4.0
Vietnam 3.9
3.4 3.6 3.8 4 4.2 4.4 4.6

Source: fDi Benchmark (Global Competitiveness Report, World Economic Forum, Switzerland, 2015-16 )

Available workforce
Unemployment rate, 2015-2020
Indonesia 6.3%
5.9%
Thailand 0.8%
0.8%
Singapore 1.9%
2.0%
Indonesia’s has the least
tight labour force in ASEAN
Vietnam 2.9%
2.4%
Malaysia 2.9%
3.2%
China 4.0%
4.1%
Philippines 6.0%
6.0%
India 8.4%
3.6%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Forecast Unemployment Rate in 2020 (%) Unemployment Ratein 2015 (%)
Source: fDi Benchmark (Economist Intelligence Unit March 2016 & International Monetary Fund 2016)

Low taxes
Total Tax Rate (% profit) in 2015
Indonesia 30%
Indonesia’s has low effective
Thailand 28% tax rates
Vietnam 39%
Malaysia 40%
Philippines 43%
China 68%
India 61%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Source: fDi Benchmark (World Bank Doing Business 2016)

Labour costs for production positions
Labour costs by country for production positions, USD, 2015*
$2,490
Indonesia $4,493
$5,748
$2,297 $4,422
Vietnam Indonesia’s has
$4,963
$2,273 highly competitive
Philippines $4,938
$5,562 labour costs
$1,424
India $4,807
$6,938
$2,947
Thailand $5,294
$7,672
$3,465
Malaysia $5,156
$807
$5,814
China $8,301
$10,277
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000
Production Operative (Unskilled) Production Operative (Skilled)
Production Operative (Highly Skilled)
Source: fDi Benchmark. Note: Singapore labour costs are $13,323 for unskilled, $26,086 for skilled, and $32,907 for highly skilled). *Includes
wages and statutory social insurance costs paid by employer
Labour costs for engineering positions
Labour costs by country for an engineer, USD, 2015*
Vietnam 11029
Indonesia’s has
Philippines 12000
highly competitive
Indonesia 13801 labour costs
Thailand 15552
Malaysia 15840
India 15893
China 24030
Singapore 57537
0 10000 20000 30000 40000 50000 60000 70000

Source: fDi Benchmark
Innovation
Total of Patent applications, non-residents (foreign investors) (2014)
Indonesia 7321
Singapore 9009
Thailand 6924
Malaysia 6267
Vietnam 3960
Philippines 3255
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Source: fDi Benchmark (World Bank World Development Indicators)

Low cost of living
Cost of Living Index, 2015*
Indonesia 1.79
India 1.4
Vietnam 1.82
Philippines 1.86
Thailand 2.14
Malaysia 2.22
China 3.28
Singapore 5.7
0 1 2 3 4 5 6
Source: fDi Benchmark *Rating 0-10 (0=lowest cost of living; 10=highest cost of living) (2014)

About BKPM and
support services
for investors

ABOUT BKPM
BKPM The Indonesia Investment Coordinating Board

Who we are
 As the primary interface between
business and government, BKPM is
mandated to boost domestic and foreign direct
investment through creating a conducive investment
climate.
 BKPM was restored to Ministerial status in 2009, and
reporting directly to the President of the Republic of
Indonesia.
 This investment promotion agency’s goal is not only
to seek more domestic and foreign investment, but
also to seek quality investments that improve

social inequality and reduce unemployment.
 The agency works as a proactive advocate for
investments as well as a matchmaker for investors.
The Indonesia Investment Coordinating Board (BKPM)
42
About BKPM
What We Offer to Investors?
 Simplification of business start up and licensing procedures, including
the “one-stop shop” (PTSP) licensing provision at BKPM, 60%
reduction of application forms (from 38 to 15 forms).
 Establishing an Investor Relation Unit at BKPM for information,
facilitation and queries handling from existing and potential
investors.
 Rolling-out of Electronic Information Services and Investment
Licensing (SPIPISE) in 105 PTSP throughout Indonesia.
 Helping contain various obstacles and giving consultation on
problems investors face in the conduct of investments.
 Facilitating foreign workers permit.
Our services for  Launching of investment tracking system and followed by its
investors implementation in other Ministries and Regional Governments.

43
Improvement of Investment Service
One
place
22 ministries
integrated
All 3-hour
sectors
162 permits
are delegated
Service
to BKPM One-Stop One-Stop
Service Integrated
(PTSP)
Industry,
at BKPM Services
power,
oil & gas, Direct
tourism Construction
at one place
90%
Regional PTSP
formed. 61%
regional PTSP
implement
e-licensing.
Thank You
Indonesia Investment Promotion Centre (IIPC)
Badan Koordinasi
Penanaman Modal
(BKPM)
Indonesia Investment
Coordinating Board
Jl. Jenderal Gatot Subroto No. 44
Jakarta 12190 - Indonesia
t . +62 21 525 2008
f . +62 21 525 4945
e . info@bkpm.go.id
www.bkp
m.go.id The Investment Coordinating Board of the Republic of Indonesia
45
Appendix 1: BKPM
support services for
foreign investors
(detailed)
Investment Service Reforms
3-hour Service (I23J) 8 permits obtained + 1

Certainty to start
Available for investors with minimum (new a business Certainty to import
or expansion project) investment of IDR 100 • Investment license capital goods
billion (USD 8 million) and/or employing
1,000 local workers. • Certificate of incorporation • APIP / Import identification
• NPWP / Tax registration • NIK / Customs registration
Or supplier of the existing manufacturing
company with minimum investment of IDR • TDP / Company registration
100 billion (USD 8 million) and/or employing Accurate land
1,000 local workers. Certainty to work Information
• RPTKA / Employment plan • Letter of land availability
No requirements for investment in
infrastructure sector. • IMTA / Working permit
BKPM
• Arrive at One-stop Integrated

Service at BKPM directly from
Wait at the lounge while
the airport.
documents are processed by
• Consult with Director of BKPM, in-house notary, ministries, Obtain eight documents & letter
Investment Service. & other government institutions. of land availability within three
• Submit the required hours to start your business.
documents & data.
Source: Chairman BKPM Reg. No. 6/2015 on Priciple License
47
Investment Priority
Service
3-hour Investment
Licensing Service
for Infrastructure
Currently there
No Minimum are three sectors
investment or is eligible and one
documents can be
workers obtained with
requirement three-hour
service.
Ministry of Energy and Mineral Resources (MEMR) Regulation No. 15

of 2016 regarding three-hour license service in Energy and Mineral
Resources. Sectors/license that is available:
• Geothermal sector (IPB),
• Electricity producer (IUPTL-S),
• Electricity transmission sector (IUPTL-S),
• Temporary downstream oil and gas business licenses.
48
Priority Investment Service
No Requirements
Direct Construction (KLIK) •No minimum investments or workers is required.
•Available for selected industrial parks.
Investors can directly start their project construction •Construction permits can be obtained in parallel
before obtaining construction permits. This service is with construction process.
supported by both Central and Regional Governments.
Obtain investment licence • Survey a land within selected 14 • Start the construction of your
at One-stop Integrated industrial parks (in North Sumatera, project. No other permits are required.
Service (PTSP) at national or Banten, West Java, Central Java, • Apply for building construction
regional level. East Java and South Sulawesi). permit/IMB & environmental permit,
• Acquire the land for your industry. and other regional licenses in parallel
with construction process.
The Investment Coordinating Board of the Republic of Indonesia
49
50
Industrial Estate with KLIK Facilities (datamaychangeanytime ,exclude 10%VAT)
No Industrial Estate Sell Price Lease Price Total Area Available
USD/M2 USD/M2 (ha) Area (ha)
1 Java Integrated Industrial and Port Estate 150 7.5/year 2,993.27 1,761.4
2 Kendal Industrial Park 110 3.5/month 2,700 860
3 Bukit Semarang Baru Industrial Estate 193 - 115 40
4 Wijayakusuma Industrial Estate 115 2.4 – 3.1/month 250 100
5 Karawang Industrial City (KIIC) Negotiable Negotiable 1,470 293
6 Bekasi Fajar Industrial Estate 269 5.76/month 1.500 300
7 Delta Silicon 8 Industrial Park 223 - 230 158
8 GT Tech Park at Karawang Industrial Park 170 – 220 - 400 100
9 Suryacipta City of Industry 170 7.25/month 1.400 100
10 Krakatau Industrial Estate Cilegon 150 - 200 3.5 – 4/month 1,152 563
11 Modern Cikande Industrial Estate 152 - 3,175 1,975
12 Wilmar Integrated Industrial Park 150-175 15-20 /year 1.748 800
13 Medan Industrial Estate 144 2.4/month 780 100
14 Bantaeng Industrial Park 4-15 - 3.000 3.000

51
Improvement of Investment Climate
CUSTOMS
CLEARENCE Import Facility for Capital Goods
Four customs checking status:
•Red lane is for new Acceleration and
companies. certainty in custom
Physical & document checks clearance process
before transported from ports. Faster & Certain
•Yellow lane •Capital goods do not require
Document check before goods screening.
transported from ports. •Cutting the processing time from
3-5 days to only 30 minutes.
•Green lane
Document check after goods
transported from ports. Simple requirements
• Projects under construction
•MainNewPartner
Facility: • Obliged in reporting quarterly
investment activities (LKPM)
Priority
Status upgrade
for companies • Recommendation from BKPM
with proven
from red to track
green record. No
lane for new
checking required.
companies under construction
52
Appendix 2:
Foreign
investment
regulations
Law No25/2007 on Investment
Presidential Reg. No. 39/2014 on Negative Investment List
Chairman BKPM Reg. No.14 & 15/2015 on Investment Licensings
54
55
INVESTMENT INCENTIVES FOR ELECTRICITY SECTOR
Based on Government Regulation No. 9/2016, MoF Regulation No. 89/PMK.010/2015 and Chairman of
BKPM Regulation No. 18/2015, investment in new and renewable energy as Power Producer (KBLI 35101) is
eligible for income tax facilities of:
a.A reduction in net income of up to 30% of the amount invested, pro-rated at 5% for six years of the
commercial production, provided that the assets invested are not transferred out within six years.
TAX ALOWANCE b.Acceleration of depreciation & amortization for building and non-building.
c.A reduction of income tax on dividends paid to non-residents to 10% or lower rate according to double
taxation avoidance agreement.
d.Extension of tax losses carry forwards for 5 years and up to 10 years (if it meets certain criteria).for 5 years
and up to 10 years (if meet certain criteria).
* Tax Allowance application is submitted to OSS-BKPM and will be processed in 25 days.
Based on Government Regulation No. 94/2010, MoF Regulation No. 159/PMK.011/2015, and Chairman of
BKPM Regulation No. 19/2015, corporate income tax exemption for the period of 5 to 15 years from the
start of commercial production is granted for company with minimum investment project value of IDR 1
TAX HOLIDAY Trillion (approx. USD 69 Million) in 9 priority “pioneer industries” including infrastructure not under PPP
scheme, for example renewable energy power plant.
* Tax Holiday application is submitted to OSS-BKPM and will be processed in 45 days.
Based on Minister of Finance (MoF) Regulation No. 66/PMK.010/2015, , and Chairman of BKPM Regulation
No. 16/2015, all green-field or expansion investment of power plant for public usage (not including
IMPORT DUTY transmission, distribution and supporting services) are granted import duty exemption on imported
EXEMPTION machineries and equipment (for 2 years) for the company usage during construcktion period, provided that
they are not or inadequately produced in Indonesia.
* Import Duty Exemption application is submitted to OSS-BKPM and will be processed in 5 days.
 FIT is a policy mechanism which obligates the State Electricity Company (PLN) under PPA without
negotiation and further price escalation to purchase the electricity generated from mini/micro hydro,
bionergy (biomass/biogas), solar PV and municipal waste, at a regulated/incentivized price.
 CP is another policy mechanism which regulates maximum offering price submitted by bidding
Feed-in Tariff (FIT)
participants (IPPs) during the procurement of hydropower and geothermal as well as coal-fired, gas,
or Ceiling Price (CT) machine-gas power plants, before winning bidder to be awarded PPA with PLN.
 Selling tariffs for electricity generated from other new & renewable energy sources like wind, marine
energy, OTEC, nuclearTheand others,
Indonesia which
Investment is (currently)
Coordinating Board (BKPM) not regulated under FIT or CP schemes, are based
on B2B negotiation with PLN.
56 56
LAND TITLE REGISTRATION
1. Right of Ownership (“Hak Milik”) Certificate; freehold, only applied for Indonesian individuals.
2. Right to Manage (Hak Pengelolaan or “HPL”) Certificate; leasehold, only applied for Indonesian state-owned or regional
government-owned enterprises.
3. Right to Cultivate (Hak Guna Usaha or “HGU”) Certificate; leasehold

• Entitled for Indonesian Limited Liability Company (local, foreign, JV) to cultivate, harvest and own agribusiness products on the
purchased land.
• Granted for the period of 35 years, can be extended to another 25 years, and renewable to 35 years.
4.Right to Build (Hak Guna Bangunan or ”HGB”) Certificate; leasehold

• Entitled for Indonesian Limited Liability Company (local, foreign, JV) to build and own all
buildings and facilities on the purchased land.
• Granted for the period of 30 years, can be extended to another 20 years, and renewable to 30
years.
5. Right to Use (“Hak Pakai”) Certificate; leasehold
• Entitled for any Indonesian Limited Liability Company (local, foreign, JV), foreign individuals, foreign representative to use land
and own all buildings and facilities on the purchased land for office or house.
• Granted for the period of 25 years, can be extended to another 20 years, and renewable to 25 years.
* The land titles are registered at the Regional Land Office (subordinate of the National Land Office, Badan Pertanahan Nasional or
“BPN”).
** Land transaction must be processed by a Land Deed Official (Pejabat Pembuat Akta Tanah or “PPAT). Most notaries are PPAT
officials but PPAT officials need not be notaries. In rural areas, PPAT officials are often local government officials, such as the “camat”
(a district head) or the head of the Regional Land Office, who has jurisdiction in the district in which the property is situated.
(Agrarian Law No. 5 1960)

57
BUSINESS MODEL FOR ELECTRICITY
Law No 30/2009 on Electricity

“Both public and private sectors are allowed to participate on power generation, transmission, distribution, sales of electricity as
IPPs (Independent Power Producers), PPUs (Private Power Utilities) or CPPs (Captive Power Plants).”
* PPUs must hold a “Business Area Approval” (Penetapan Wilayah Usaha) to generate, transmit, distribute electricity to their own
customer base (such as tenants of an Industrial Estate). PPUs may sell excess capacity to PLN or directly to end-customer, subject
to the approval of the relevant Minister, Governor or Mayor/Regent (which is likely in remote areas where customers are not
connected to the PLN’s grid). PPU may rent PLN’s grid (transmission & distribution) under “Power Wheeling” mechanism.
President Regulation No 44/2016

(popularly known as Negative Investment List)
Electricity Sectors Maximum Foreign Share Ownership Specific
Licences
< 1 MW Closed for FDI IUPTL-S &
Power Plant: IPP/PPU/CPP IUPTL-T (only
1 – 10 MW 49 %
(KBLI: 35101) for IPP &
=< 10 MW 67 % (for Geothermal Power Plant) PPU), PWU
(only for IPP),
> 10 MW 95 % (for non PPP project) or 100% (for PPP project during concession period) IO / SKT /
Transmission (KBLI: 35102) 95 % (for non PPP project) or 100% (for PPP project during concession period) Laporan (only
for CPP, SLO
Distribution (KBLI: 35103) 95 % (for non PPP project) or 100% (for PPP project during concession period)
Consultant (KBLI: 71102) 95% IUJPTL
Construction/EPC (KBLI: 42213) 95% (for Power Plant), 49% (for Transmission), Closed for FDI (for Distribution)
Operation & Maintenance/O&M (KBLI: 43211) 95%
Inspection & Testing (KBLI: 71204) 49% (for Power Plant & Transmission), Closed for FDI (for Distribution)
Indonesia Investment Promotion Centre (IIPC) - Overseas Representative of Indonesia Investment Coordinating Board (BKPM) in London, UK 58
Appendix 3:
Feed-in tariffs

Feed –in Tariff (FIT)
Mini/Micro Hydro Power Plant (PLTM/PLTMH)
No Region Feed-in Tariff (cent USD/kWh)
River Flow Using dam and/or irrigation channel)
MV (up to 10 MW) LV (up to 250 kW) MV (up to 10 MW) LV (up to 250 kW)
Y1-Y8 Y9-Y20 Y1-Y8 Y9-Y20 Y1-Y8 Y9-Y20 Y1-Y8 Y9-Y20
1 Java, Bali & Madura 12 7.5 14.4 9 10.8 6.75 13 8,1
2 Sumatra 13.2 8.25 15.84 9.9 11.88 7.425 14.3 8.91
3 Kalimantan & 14.4 9 17.28 10.8 12.96 8.1 15.6 9.72
Sulawesi
4 West & East Nusa 15 9.375 18 11.25 13.5 8.4375 16.25 10.125
Tenggara
5 Moluccas & North 15.6 9.75 18.72 11.7 14.04 8.775 16.9 10.53
Moluccas
6 Papua & West Papua 19.2 12 23.04 14.4 17.28 10.8 20.8 12.96
Note:
FIT is levelized base price on generation bus bar applied after Commercial Operation Date (COD); including
interconnection cost; with contract duration of 20 years; and based on:
 grid connectivity: to MV (Medium Voltage, 20 kV) or LV (Low Voltage, 220 V), and
 operating years: Y1-Y8 (year 1st until year 8th) and Y9-Y20 (year 9th until year 20th ).
The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase
electricity generated by Independent Power Producer (IPP) decided as “PLTMH Developer” by DG NREC-MEMR.
IPP should refers to National Electricity Master Plan (RUPTL) 2016-2025.
Source: MEMR Regulation No 19 of 2015.

60
Ceiling Price(CP)
Geothermal Power Plant (PLTP)
Year of Commercial Feed-in Tariff (cent USD/kWh)
Operation Date
Region I Region II Remote areas which are
(COD)
situated in Region I & II
2015 11.80 17.00 25.40
2016 12.20 17.60 25.80
2017 12.60 18.20 26.20
2018 13.00 18.80 26.60
2019 13.40 19.40 27.00
2020 13.80 20.00 27.40
2021 14.20 20.60 27.80
2022 14.60 21.30 28.30
2023 15.00 21.90 28.70
2024 15.50 22.60 29.20
2025 15.90 23.30 29.60
Note:
Region I: PLTP located in Sumatra, Java and Bali.
Region II: PLTP located in Sulawesi, Nusa Tenggara, Halmahera, Mollucas, Papua and Kalimantan.
CP is levelized base price on generation bus bar applied after Commercial Operation Date (COD); not including price
escalation and interconnection costs; with contract duration of 30 years.
The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase electricity
generated by Independent Power Producer (IPP) winning IUP (Geothermal Mining License) through WKP (Geothermal
Working Area) Open Tender mechanism held by MEMR, Governor or Mayor/Regent.
The Indonesia Investment Coordinating Board (BKPM) Source: MEMR Regulation No 17 of 2014.
61
Bio Energy Power Plant (PLTBm/PLTBg)
No Region Feed-in Tariff (cent USD/kWh)
Biomass (PLTBm) Biogas (PLTBg)
Capacity >20 up to ≤ 20 MW >20 up to > 50
≤ 20 MW > 50 MW
50 MW 50 MW MW
Grid Connection LV MV/HV HV HV LV MV/HV HV HV
1 Java Island 16.00 13.50 11.48 10.80 13.14 10.64 9.05 8.51
2 Sumatra Island 18.40 15.53 13.20 12.42 15.11 12.24 10.41 9.79
3 Sulawesi Island 20.00 16.88 14.35 13.50 16.43 13.30 11.31 10.64
4 Kalimantan Island 20.80 17.55 14.92 14.04 17.08 13.83 11.77 11.06
5 Bali, Bangka Belitung
24.00 20.25 17.22 16.20 19.71 15.96 13.58 12.77
and Lombok Islands
6 Riau, Nusa Tenggara
25.60 21.60 18.37 17.28 21.02 17.02 14.48 13.62
Other Islands
7 Maluku and Papua
27.20 22.95 19.52 18.36 22.34 18.09 15.39 14.47
Islands
** As Excess Power 16.00 13.50 11.48 10.80 13.14 10.64 9.05 8.51
Note:
FIT is levelized base price on generation bus bar applied after Commercial Operation Date (COD); including
interconnection cost; with contract duration of 20 years (except as excess power max 1 year extendable); and based on:
 capacity: up to 20 MW, above 20 MV up to 50 MW or above 50 MW
 grid connectivity: to LV (Low Voltage, 220 V), MV (Medium Voltage, 20 kV) or HV (High Voltage, ≥ 70 kV)
The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase electricity
generated by Independent Power Producer (IPP) decided as “PLTBm/PLTBg Developer” by DG NREC-MEMR.
The Indonesia Investment Coordinating Board (BKPM) Source: MEMR Regulation No 21 of 2016.
62
Feed –in Tariff
Municipal Waste Power Plant (PLTSa)
Feed-in Tariff (cent USD/kWh)
Methane Gas Utilization
using Sanitary Landfill,
Thermal Utilization using Termochemical Technologies
Anaerob Digestion or Similar
Technologies
Above 20 MW up to 50
Up to 20 MW Up to 20 MW Above 50 MW
MW
HV MV LV HV MV LV HV MV LV HV MV LV
16.55 20.16 18.77 22.43 15.95 - - 13.14 - -
Note:
Feed-in Tariff (FIT) is levelized base price on generation bus bar applied after Commercial Operation Date (COD);
including interconnection cost; with contract duration of 20 years; based on grid connectivity: HV (High Voltage,
above 20 kV), MV (Medium Voltage, 20 kV) or LV (Low Voltage, 220 V).
The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase
electricity generated by Independent Power Producer (IPP) decided as “PLTSa Developer” by DG NREC-MEMR from
Open Tender mechanism held by Regional Government.
Source: MEMR Regulation No. 44 of 2015.

63
Solar PV Power Plant (PLTS)
No Region
Quota Capacity Feed-in Tariff (cent
(MW) USD/kWh) Note:
Feed-in Tariff (FIT) is levelized base price on
1 DKI Jakarta generation bus bar applied after Commercial
2 West Java Operation Date (COD); including interconnection
3 Banten 150,0 14,5 cost; with contract duration of 20 years.
4 Central Java and DIY
5 East Java Quota capacity in total of 250 MW as stated in the
6 Bali 5,0 16,0 table on the left, is the first phase from the total
7 Lampung 5,0 15,0 quota of above 5,000 MW to be offered by the
8 South Sumatera, Jambi, Goverment. FIT could be differed on each phases.
10,0 15,0
and Bengkulu
9 Aceh 5,0 17,0 The procurement will be held online by DG NREC-
10 North Sumatera 25,0 16,0 MEMR (registration, initial verification, quota
11 West Sumatera 5,0 15,5 request, final verification on first come first served
12 Riau and Riau Islands 4,0 17,0 verification basis).
13 Bangka Belitung 5,0 17,0
14 West Kalimantan 5,0 17,0 The State Electricity Company (PT PLN)—under
15 South and Central Power Purchase Agreement (PPA)—is obliged to
4,0 16,0
Kalimantan purchase electricity generated by Independent
16 East and North Kalimantan 3,0 16,5 Power Producer (IPP) decided as “PLTSa Developer”
17 North and Central by DG NREC-MEMR.
5,0 17,0
Sulawesi, Gorontalo
18 South, Southeast and West  IPP should refers to National Electricity Master
5,0 16,0
Sulawesi Plan (RUPTL) 2016-2025.
19 West Nusa Tenggara 5,0 18,0
20 East Nusa Tenggara 3,5 23,0
21 Maluku and North Maluku 3,0 23,0
22 Papua and West Papua 2,5 25,0
Source: MEMR Regulation No. 19 of 2016.
64
Latest Updates on Feed –in Tariff (FIT)
Feed-in Tariff (FIT) for:
• Home System (rooftops) Solar PV (likely will be under the net metering system),
• Windfarm (probably a combination of FIT for small scale windfarm and Ceiling Price
for high scale one)
are currently being prepared by the Ministry of Energy and Mineral Resources.
By then, tariff(s) should be negotiated between IPP and PLN.

65
Negotiation with PLN ... PLN’s Basic Cost of Electricity
Production as Proxy??
No PLN’s Local Unit (Area/Distribution) Basic Cost of Electricity Production (as of June 2015)
IDR/kWh USD cent/kWh
1 Maluku and North Maluku 3,126 22.33
2 East Nusa Tenggara (NTT) 2,988 21.34
3 West Kalimantan (Kalbar) 2,701 19.29
4 Aceh 2,683 19.16
5 Papua and West Papua 2,680 19.14
6 Bangka Belitung (Babel) 2,671 19.08
7 West Nusa Tenggara (NTB) 2,481 17.72
8 North Sumatra 2,341 16.72
9 North & Central Sulawesi and Gorontalo (Sultenggo) 2,185 15.61
10 East Kalimantan (Kaltim) 1,882 13.44
11 Riau and Riau Islands 1,711 12.22
12 South and Central Kalimantan (Kalselteng) 1,613 11.52
13 South, South East and West Sulawesi (Sulselrabar) 1,437 10.26
14 West Sumatra 1,353 9.66
15 Lampung Distribution 1,351 9.65
16 South Sumatra, Jambi & Bengkulu (S2JB) 1,340 9.57
17 East Java Distribution (Disjatim) 1,137 8.12
18 Bali Distribution (Disbali) 1,218 8.70
19 Central Java and Yogyakarta Distribution (Disjateng) 1,153 8.24
20 Jakarta and Tangerang Distribution (Disjaya) 1,113 7.95
21 West Java and Banten Distribution (Disjabar) 1,099 7.85
INDONESIA (AVERAGE) 1,272 9.09 66
ELECTRICITY TARIFF (Oct 2016)
Fact: Outside Java, PLN sells electricity to consumers less than their Basic Cost of Electricity Production
Equals to
~ USD 11 cents/kWh

67

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November 1st, 2016

Indonesia Investment Coordinating Board

Indonesia has the 4th Indonesia is one of the

Indonesia’s GDP will Access to the $2.5 trillion

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0 50 100 150 200 250 300 350

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3.4 3.6 3.8 4 4.2 4.4 4.6

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0% 10% 20% 30% 40% 50% 60% 70% 80%

Source: fDi Benchmark (World Bank Doing Business 2016)

Indonesia Investment Coordinating Board

0 10000 20000 30000 40000 50000 60000 70000

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