Business News Archive

Search Our News Archive


Repsol Makes Largest Gas Discovery In Indonesia In 18 Years

ENERGY - Indonesia
March 2019

Repsol, the Spanish energy company, has made the largest gas find in Indonesia in 18 years. The discovery was made in the Sakakemang block in South Sumatra. The KDB-2X well in South Sumatra provides preliminary estimation of at least 2 TCF of recoverable resources or over 250 million barrels of oil equivalent. As an operator, Repsol holds a 45% working interest, while PETRONAS and MOECO owns 45% and 10% respectively.

The discovery is located 25km away from the Grissik gas plant which has the ability to gather and process production from ConocoPhillips-operated Corridor PSC. Corridor PSC is the main supplier of gas to Singapore and West Java. Repsol’s gas discovery came as a positive source for new supply to prolong the life of the Corridor PSC.

Repsol will continue the exploratory work in the coming months with an additional planned appraisal well. It has cooperated closely with SKK Migas on the exploration activity and continues to work on the next steps with Indonesian authorities.

SKK Migas, Indonesia’s upstream regulator, has been upbeat in its exploration efforts notwithstanding a decline in new investment activity. It is targeting of a discovery of at least one new giant field (500 million boe) by 2023.

(Sources: Energy Voice; Energy Global)

Indonesia Undertaking Revision Of Oil And Gas Law

ENERGY - Indonesia
February 2019

Indonesia plans to revamp its 2001 oil and gas law to increase oil and gas production, boost Indonesia’s energy independence and strengthen investment in the country’s human resources in the sector. The proposed changes include the creation of a new special oil and gas agency, called BUKMigas, which will act as regulator, taking over from the current upstream regulator Special Taskforce for Upstream Oil and Gas Business Activities (SKKMigas) and the downstream regulator, BPHMigas. However, BPHMigas will continue to carry out oversight of pipeline fuel and gas transportation

BUKMIgas may perform upstream activity including oil and gas exploration. Currently, such activities are undertaken by state or private companies who receive contracts from the upstream regulator, SKKMigas. BUKMigas may also work in partnership with oil and gas contractors who must propose extensions 8 years before contracts expire at the latest. Currently,  contractors can propose extensions 10 years before contracts expire at soonest and 2 years before contracts expire at latest.

BUKMigas would also be tasked to develop refineries with possible cooperation with state enterprises or other companies. The current law does not give authority for regulatory agencies to develop oil and gas infrastructure. BUKMigas will also control oil and gas imports and exports. 

Under the new proposed regulation, Indonesia will have a state petroleum fund for the first time in history. The Ministry of Energy and BUKMigas will manage the fund in one bank account. The petroleum fund will receive the revenue that government makes from oil and gas production, as well as levies and bonuses. The fund will be utilized to compensate for exploration activities, develop infrastructures and pay for research and development in the oil and gas sector.

(Sources: Gulf Times; Reuters)

Indonesian Energy Ministry Approves Merakes Development Project

ENERGY - Indonesia
January 2019

In December 2018, the Minister of Energy of Indonesia approved Eni’s investment plan for the Merakes project, located in Kutei Basin, offshore East Kalimantan. Eni is an Italian multinational oil and gas company operating in 71 countries worldwide.

The Merakes development project consists of drilling and construction of subsea walls with a dedicated transport system in water depths of up to 1,500 metres and connected to the Jangkrik Floating Production Unit (FPU). The gas will then be shipped to the Bontang LNG plant using existing facilities. This new production will contribute to the life extension of the plant and help meet EWQ1`EWDthe ongoing gas demand in Indonesia.

Eni also successfully drilled and tested the Merakes East prospect in East Sepinggan block, located 3 kilometers east of the Merakes Field. The proximity of this new discovery will allow Eni to maximize the synergies among the subsea infrastructures, as well as save time and cost of the execution of the future subsea development. Eni is the operator of East Sepinggan Contract Area through its subsidiary Eni East Sepinggan Limited which holds an 85% Participating Interest, while PT Pertamina Hulu Energi East Sepinggan holds the remaining 15%. 

The Eni BoD approval came just a few days after the conversion to the Gross Split Scheme of the East Sepinggan PSC (Production Sharing Contract) and the approval of the revised field development plan under the terms of the Gross Split by the Minister of Energy of Indonesia. Eni has agreed to use Gross Split Production Sharing Cost (PSC) scheme to develop the gas field as opposed to conventional cost recovery. The gross split PSC, which removes the cost recovery element, with all production directly split between the government and the participants, was introduced in late 2016 to stimulate investment in upstream oil and gas in Indonesia, by streamlining the regulation of the sector. 

(Sources: Offshore Engineer; Kallanish Energy; Eni)

EDF To Develop Renewable Energy Power Plants In Indonesia

ENERGY - Indonesia
November 2018

Electricite de France (EDF) Group, the French electricity utility company with a global presence, is partnering with Indonesian companies to build renewable energy power plants. The four Indonesian companies are the state-owned PLN, PLN subsidiary PT Indonesia Power, PT Kencana Energi Dunia and PT Adaro Energy. The collaboration would build upon EDF’s capability in Indonesia.

EDF has started a project with PT Adaro Energy, using the combination of biomass and solar energy to develop power plant on an island with 5,000 people. Furthermore, EDF has teamed up with PLN and PT Indonesia Power to conduct feasibility studies to develop power plants for islands and remote areas utilizing solar and hydro energies.

(Source: The Jakarta Post)

PLN To Generate 100MW Electricity From Two Solar Power Plants In Bali

ENERGY - Indonesia
October 2018

State-owned electricity distributor, PLN Distribution, revealed that the recently two privately built power units in the West and East Bali will be solar power plants (PLTS). The two PLTS will start operations by the beginning of 2021 and are expected to contribute up to 100 MW of electricity to the island.

The development of renewable energy, such as solar, is in line with the Indonesian government’s commitment to the Paris Agreement and its goal to have 25% share of renewables in the energy mix  by 2025. Bali is joining the effort by making the island a green province, independent of energy. It is hoped that more people and private businesses will get on board to make power cheaper.

Recently, Indonesia handed over the responsibility of creating communal solar panels and mini-hydropower plants in remote regions of the country to its state owned electricity company, PLN. Moving forward, PLN will have full power to negotiate for price directly with Independent Power Producers (IPPs).

(Sources: Gapura Bali; The Jakarta Post)

Indonesian Government Expanding Biodiesel Subsidies

ENERGY - Indonesia
September 2018

Indonesia's President Joko Widodo signed a revised regulation for the Estate Crop Fund (BPDPKS) to support the country’s B20 Biodiesel Policy, which mandates all diesel in Indonesia to have a 20% bio-component, usually derived from palm oil, starting from September 2018. The new regulation will absorb excess supply of palm products in the market, as well as reduce Indonesia’s dependency on diesel fuel imports. 

BPDPKS was formed in July 2015 with the aim of managing the income derived from levies on exporters of palm oil commodities. Part of the funds are used to subsidize biodiesel, which is more expensive to produce as compared to petroleum diesel. To break even on production costs, biodiesel has to be sold at over IDR 9,000 (USD 0.61) a liter, while petroleum diesel currently costs around IDR 5,150 (USD 0.35) a liter. 

This revision expands the fund’s ability to subsidize the price gap between biodiesel and petroleum-based diesel. Earlier, the fund was limited to subsidize Public Service Obligation (PSO) sectors, such as certain transport and power stations. The fund collected IDR 14.2 trillion rupiah (USD 972 million) in levies last year, and provided subsidies on 2.3 million kiloliters of biodiesel.

Under the new rule, 19 biodiesel producers such as Wilmar and the Sinar Mas Group, will receive incentives to narrow the pricing gap between PSO and non-PSO sectors. 

The fund would require up to IDR 9.8 trillion (USD 672 million) to subsidize the production of 3.2 million kiloliters of biofuel for 2018. The government estimates that the policy would raise biodiesel consumption to between 5.5 million to 6 million kiloliters in 2019 from 4 million kiloliters on 2018. This is expected to help reduce fuel imports and bring down the current account deficit by around USD 6 billion per year. 

(Sources: Reuters; Jakarta Globe)

Well Drilling Starts At 220 MW Rantau Dedap Geothermal Power Plant

ENERGY - Indonesia
August 2018

On 4 August 2018, 220 MW Rantau Dedap geothermal project in Muara Enim regency, South Sumatra, commenced its exploitation phase by the drilling of the first production well. Indonesian geothermal producer, PT Supreme Energy, will carry out the plant construction in two phases, with 90.9 MW planned capacity for the first phase. In the development stages, it aims to drill 16 wells, comprising of 14 production wells and 2 injection wells. Once completed in mid-2020, the power plant will supply electricity to PT PLN (Persero) based on a 30-year purchase agreement. The project opens jobs for around 1,200 people. 

PT Supreme Energy Rantau Dedap is a collaboration between Supreme Energy, French energy company Engie, Marubeni Corporation and Tohoku Electric Power Co. Inc. from Japan. In addition to Rantau Dedap Supreme Energy is collaborating with Engie and Sumitomo Corp. for the Muralaboh geothermal project in West Sumatra through PT Supreme Energy Muara Laboh and Rajabasa in Lampung through PT Supreme Energy Rajabasa.

Indonesia's ministry has made geothermal energy one of its top priorities in the energy sector, striving to reach Indonesia's 28.5 gigawatts potential. The government plan to escalate the country's portion of renewable energy (EBT) to attain sustainable energy security nationally. 

(Sources: Think Geoenergy; Jakarta Post)

75 MW Wind Turbine Power Plant Inaugurated In South Sulawesi

ENERGY - Indonesia
July 2018

On 2 July 2018, the Indonesian President Joko Widoko inaugurated the country’s first wind turbine power plant, which is based in Sidrap (South Sulawesi). The plant, which has a total capacity of 75 MW, consists of 30 wind turbine generators and is projected to be able to supply electricity to 70,000 customers in the region, with an average electric power of 900 VA. The Sidrap plant is situated on a 100-hectares plot of land. The 30 wind turbine generators each have a height of 80 metres, while the propellers have a length of 57 metres. The construction of the plant provided employment to around 1,150 people. Around 40% of the materials for the construction of the plant had been sourced domestically. 

In addition to the inauguration of the Sidrap plant, President Widoko is also scheduled to inaugurate the Punagaya steam power plant (2x100 MW), owned by state-owned electricity firm Perusahaan Listrik Negara (PLN), and the Jeneponto Expansion (2x135 MW), owned by an independent power producer.

The Sidrap plant is part of the government’s efforts to boost the contribution of renewable energy to the country’s energy mix. By the year 2023, Indonesia targets to have 23% of its energy requirements supplied by renewable sources, such as wind, geothermal or solar. These projects are also part of the government’s aim to increase the nation’s electrification ratio, which currently stands at around 96%, to 99% by 2019.

(Sources: Indonesia Investments; The Jakarta Post)

ADB Announces Financing Package For Indonesia's First Utility-Scale Solar PV Plants

ENERGY - Indonesia
June 2018

In May 2018, the Asian Development Bank (ADB) announced a private sector financing package of USD 40 million to support the development of Indonesia’s first utility-scale solar photovoltaic (PV) plants on a project-finance basis. The loan package is part of a two-phased financing totalling approximately USD 160 million for new renewable energy investments in the country.

ADB will invest in two phases in renewable energy assets, which are being developed by Vena Energy, formerly known as Equis Energy - the largest renewable energy independent power producer (IP) in the Asia and Pacific Region. The company currently has 11 GW capacity in operation, under construction, and in development. The investment will help construct, operate, and maintain a portoflio of energy projects, including a wind farm and four solar PV plants in eastern Indonesia.  

The first phase, which was signed in December 2017, consisted of a 72  MW wind power plant in Jeneponto, South Sulawesi. ADB’s financing package to PT Energi Bayu Jeneponto, a subsidiary of Vena Energy, totalled USD 120.8 million, including financing from two trust funds administered by ADB, namely, the Leading Asia’s Private Infrastructure Fund (LEAP) and the Canadian Climate Fund for the Private Sector in Asia II (CFPS II).

The second phase, which achieved first drawdown this May, comprises a 21 MW solar PV power plant in Likupang, North Sulawesi, and three 7 MW solar PV power plants in Pringgabaya, Selong, and Sengkol in Lombok, West Nusa Tenggara. ADB’s financing package for these projects totalled USD 40.2 million. The second phase also involved the administration of loans from LEAP and CFPS II. The wind and solar power plants will supply energy to Perusahaan Listrik Negara (PLN) Indonesia’s national power utility.

By supporting a sector-changing financing for renewable energy, with an innovative portfolio approach, ADB and Vena Energy have been able to add over 114 MW of clean energy to Indonesia’s electricity grid, while helping reduce the country’s dependence on fossil fuels and promoting renewable energy development. The country has made strong commitments to renewable energy, pledging to leverage the country’s considerable solar and wind energy resources to take renewables to 23% of Indonesia’s overall energy mix by 2025.

(Sources: Asian Development Bank; Deal Street Asia)

Geothermal Investment In Indonesia Projected To Reach USD 1.7bn In 2018

ENERGY - Indonesia
May 2018

Indonesia expects geothermal investment to reach USD 1.7 billion (IDR 22.23 trillion) in 2018, representing approximately 80% of projected funding in the renewable enery field as a whole.  

At the end of Q1-2018 Indonesia's installed geothermal electricity holding capacity reached 1,925 MW, surpassing the 1,868 MW capacity of the Philippines and becoming the second largest geothermal power producer in the world. Moreover, by the end of 2018, Indonesia is predicted to build up its geothermal strength capacity to 2,058 MW. But, Indonesia has a long way to go to catch up to the largest producer of geothermal energy in the world, the US, which has capacity of around 3,600 MW. 

The largest investment contributionof USD 400 million will come from state-owned energy corporation, PT Pertamina (Persero) through its subsidiary, PT Pertamina Geothermal power (PGE), followed by USD 362 million from geothermal power producer, PT Supreme Energy.

In March 2018, the Asian Development Bank (ADB) signed a loan agreement of approximately USD 175.3 million with PT Supreme Energy Rantau Dedap (SERD) to help finance the second phase of the company's geothermal power project in South Sumatra Province, Indonesia., which will generate around 90 MW.  SERD is a joint venture consisting of PT Supreme Energy; the Japanese trading and investment company, Marubeni Corporation; the Japanese power utility Tohoku Electric Power; and global energy leader ENGIE. 

Star Energy and Medco are expected to invest around USD 200 million each.  

With an estimated 29,000 megawatt (MW) of potential, Indonesia holds around 40% of the world’s total geothermal reserves, but the current utlilisation is only 6%. It will be important  to boost this utilisation if for the country to meet its targets of renewables contributing 23% of energy requirements by 2025 and reducing carbon dioxide emissions by 29% by 2030.

(Sources: Think Geoenergy, Indonesia Investments, Asian Development Bank)

USD 175.3 Million For Geothermal Energy Development In Western Indonesia

ENERGY - Indonesia
April 2018

At the end of March 2018, the Asian Development Bank (ADB) signed a loan agreement of approximately USD 175.3 million with an Indonesian company, PT Supreme Energy Rantau Dedap (SERD), to support the second phase of a geothermal power project development in Indonesia. The geothermal energy project, located in the South Sumatra province of Indonesia, is expected to generate more than 90 MW of electricity and avoid over 400,000 tons of CO2 emissions every year by 2021.

With an estimated 29 GW of potential geothermal power generation capacity, Indonesia has about 40% of the world’s geothermal reserves, making it an important resource for the country to achieve its commitments to reduce carbon dioxide emissions by 29% by 2030. The geothermal project, with the support of ADB, is expected to help the country get closer to this goal.

The project is led by SERD, which is a joint venture consisting of the Indonesian power developer, PT Supreme Energy; the Japanese trading and investment company, Marubeni Corporation; the Japanese power utility Tohoku Electric Power; and global energy leader ENGIE. SERD’s geothermal facilities are expected to generate enough electricity to power up to 130,000 homes, create jobs, and avoid over 400,000 tons of carbon dioxide emissions every year by 2021.

As part of the financing, ADB is expected to administer an additional loan provided by the Clean Technology Fund (CTF), which is a rollover amount from an existing CTF facility for the first phase of the project. The CTF loan for the first phase helped to confirm the commercial resource size and allow the project to proceed to financing of construction and operations. The USD 175.3 million deal adds to ADB’s continued efforts to scale up private sector-led infrastructure development and support clean energy investments in the Asia Pacific region.

In addition to ADB, the Japan Bank for International Cooperation and three commercial banks under a guarantee from Nippon Export and Investment Insurance are providing financing for the project worth approximately USD 188.8 million and USD 125.9 million, respectively.

(Sources: Asian Development Bank; OpenGov Asia)

Indonesia Acts To Attract Investment In Oil & Gas Sector

ENERGY - Indonesia
March 2018

Indonesia has scrapped a total of 186 energy regulations and permit requirements, in an attempt to make its energy sector more attractive to foreign investors. The country is seeking USD 50 billion in investments to offset the decline in its mature oil and gas fields. In an effor to cut red tape, the Ministry of Energy and Mineral Resources has revoked 90 general regulations and 96 other rules relating to permits, certification requirements and government recommendation prerequisites for certain energy projects. It hopes to provide a more investor-friendly climate in its energy sector, including oil and gas, minerals, coal, and renewables.

Last year, Indonesia revised the terms of its production sharing contracts (PSCs) to make them more attractive for investors, just months after it launched the PSC-scheme for oil contracts. Nevertheless, experts still thought that Indonesia needed to change the regulatory and fiscal regimes to become an attractive destination for oil and gas development in the current oil price environment.

The local units of large international companies have also called on Indonesia to cut the red tape in order to cut production costs for international investors.

(Source: OilPrice)

Indonesia's New "Gross-Split" Contract Model For The Oil & Gas Sector

ENERGY - Indonesia
February 2018

Indonesia's Energy and Mineral Resources Ministry has put 26 oil and gas blocks up for auction, consisting of 24 conventional blocks, one shale block and one coal bed methane block. The winners of the upcoming tender will operate all of those blocks using the new "gross-split mechanism", which requires investors to pay exploration and production costs instead of relying on the government’s reimbursement as seen under the former cost-recovery scheme. 

The ministry is optimistic that it will also find many bidders for blocks offered through the auction. In January 2018, the Indonesian government issued a favorable tax ruling to be applied to oil and gas PSC, based on a gross split scheme, as a move to attract more investors into the oil and gas sector. It is also planning a series of roadshows in Europe and the USA to promote upstream investments in the country from large energy companies as well as the new gross-split contract model.

(Sources: Asia News Network; Insider Network: The Oil & Gas Year)

Finnish Clean Energy Company Supplies Wave Energy Park To Bali

ENERGY - Indonesia
January 2018

Indonesian infrastructure construction company Gapura Energi Utama (GEU), has ordered a 10 MW Wello Penguin wave energy park from Finnish clean energy company Wello, which has developed a wave energy solution that captures energy derived from passing ocean waves. The patented Wello Penguin wave energy converter has been developed and tested for almost 10 years. The device has experienced the harshest ocean conditions and waves up to 18 meters. The Wello Penguin floats on water and captures kinetic energy from the waves, which is then turned into electrical power with zero emissions. The device does not have any moving parts in contact with sea water and the service needs are minimal. Remote connection allows for continuous monitoring and adjustment of the solution. The Wello Penguin produces no visual or noise pollution and can be utilized on almost any ocean coast.

The energy park will be located next to Nusa Penida Island located just off the southern coast of Bali and will be the largest wave energy park globally. The delivery will take place after the permit is finalized, which is estimated to occur in the end of 2018. The potential market for the Wello Penguin in Indonesia alone is worth over a billion euros. Wello has also entered into a representation agreement for the Indonesian market with GEU.

According to GEU, Indonesia’s ocean wave energy potential remains largely unexploited. Teaming up with Wello will give the company an opportunity to capture the huge ocean waves utility market.

(Source: Wello)

PJB & Masdar Sign PDA for World's Largest Floating Solar Plant In Indonesia

ENERGY - Indonesia
December 2017

Indonesian power company PT Pembangkitan Jawa-Bali, a subsidiary of the state electricity company Perusahaan Listrik Negara (PLN), and Masdar, an Abu Dhabi future energy company, have signed a project development agreement (PDA) for the world’s largest floating solar photovoltaic (PV) power plant. With a capacity of 200 MW, the plant will cover an area of 225 hectares atop the Cirata Reservoir in the West Java province of Indonesia. The 6,000-hectare Cirata Reservoir already powers a 1GW hydroelectric power station.

One of the advantages of floating solar power in tropical countries like Indonesia is that it enables renewable energy development in forested regions generally unsuitable for conventional solar power. The successful deployment of the Cirata project paves the way for the installation of floating solar power on another 60 reservoirs across Indonesia. The planned 200 MW floating PV project will be mounted on 700,000 floats moored to the bed of the Cirata reservoir and connected by electrical cables to an onshore high-voltage substation. Besides producing clean power, the facility will provide shading against the sun, reducing evaporation from the reservoir and limiting the growth of algae.

With a population of more than 250 million, Indonesia is the largest country in the South East Asia. Indonesia has set a renewable energy target of 31% by 2050. According to the International Renewable Energy Agency (IRENA), the country has the potential to produce more than 700 GW of renewable energy, including 532.6 GW of solar power.

(Source: Masdar)

IDR 3.7 Trillion Fund Allotted To Push Geothermal Development In Indonesia

ENERGY - Indonesia
November 2017

The Ministry of Energy and Mineral Resources has readied an exploration budget of IDR 3.7 trillion to push its geothermal development plans in the Indonesian archipelago. Moreover, PT Sarana Multi Infrastruktur (PT SMI) has been selected by the government to oversee the development of geothermal projects in the country. The funding will be acquired from World Bank grants, amounting to USD 55.25 million and the country's own share of funding sourced from the state budget, which is worth IDR 3 trillion (USD 275 million).

PT SMI has been tapped by the government to execute some projects relating to the provision of data and information on geothermal energy, as a way for the government to lessen the exploration risks and attract financing from banks and other funding institutions. 

Director of Geothermal of Directorate General of Renewable Energy and Energy Conservation trusts that this will energize the geothermal segment in Indonesia, while making sure that the administration continues to support the need of programs that promote sustainable power.

(Source: ThinkGeoenergy)

Scotland's Atlantis Wins Big In Indonesia's 150 MW Nautilus Tidal Energy Project

ENERGY - Indonesia
November 2017

SBS Energi Kelautan (SBSEK), owner of the 150 MW Nautilus Tidal Stream Project in Indonesia, has announced final investment decision has been taken with its investors to progress with Phase 1 (12 MW) of the project. This represents an important step towards a firm order for 8 x 1.5MW Atlantis AR1500 turbine systems. Phase 1 of the Nautilus project will be supported by a 30-year power purchase agreement in place with the State owned electrical utility company, PT. Perusahaan Listrik Negara (Persero) (PLN).

Earlier this year, Atlantis signed a Preferred Supplier Agreement (PSA) with SBS INTL LTD (SBS), a privately-owned international marine, subsea and renewable energy project developer, for the supply of turbines, engineering services and equipment for the Nautilus project which is located in Lombok, Indonesia. Under this PSA, Atlantis will manufacture and install 8 x 1.5 MW turbines by Q1 2020 (Phase I), followed progressively by a site expansion to 70 MW (Phase II) and ultimately up to a potential capacity of 150 MW (Phase III). The supply of turbines will be subject to agreement of full contractual terms between the relevant parties. SBSEK has awarded the Engineer, Procure, Construct, Install and Manage contract for offshore surveys; completion of FEED; EIA studies; turbine/power cable manufacturing turbine assembly, system integration testing and installation activities to SBS.

According to Atlantis, this represents its largest ever equipment order from Asia. With 100 x 1.5 MW turbines planned for the total project, it equates to a multi-hundred million dollar supply contract for Atlantis. The deal affirms the clear potential that Indonesia has for commercial-scale tidal power.

(Source: Atlantis)

Indonesia Seeks PH Power Investments

ENERGY - Indonesia
November 2017

The Indonesian government is encouraging Philippine companies to invest in Indonesia's power framework, especially in the development of its geothermal sector. The Minister of National Development Planning of Indonesia has stressed that the more advanced capabilities of the Philippines will be beneficial to enhance Indonesia's own geothermal resources.  For one, Philippine corporation Metro Pacific Investments Corp (MPIC) has expressed its interests in tapping Indonesia to widen its investment portfolio through its unit Metro Pacific Tollways Corp. The company is keen on entering the Indonesian market and put its resources into different sectors, such as in energy, water, and telecom, aside from tollways. At present, the company has a key association with PT Nusantara Infrastructure Tbk for the toll business.

(Source : Malaya Business Insight)

ADB To Provide Indonesia's Energy Sector With Over $1 Billion In Loans

ENERGY - Indonesia
October 2017

The Asian Development Bank’s (ADB) Board of Directors has approved two loans totaling up to USD 1.1 billion to strengthen and diversify Indonesia’s energy sector — considered key to promoting inclusive growth and sustainable development in the country. The first is a USD 500 million policy-based loan (including USD 100 million from the ASEAN Infrastructure Fund) for the Sustainable and Inclusive Energy Program—Subprogram 2. The second is a USD 600 million results-based loan to the State Electricity Corporation (PLN), guaranteed by the Republic of Indonesia, which will boost access to sustainable and modern energy services in eastern Indonesia.

With help from this policy-based support, the government will build on various reforms to improve fiscal sustainability, such as further rationalizing tariffs; introduce measures to improve private investment in electricity and gas; and support the scale-up of renewable energy and energy efficiency measures. The accompanying technical assistance grant will support the expansion of energy efficiency programs through efficiency standards and labelling and testing programs for household appliances, and the development of private-sector investments in energy efficiency projects.

The USD 600 million loan to PLN, meanwhile, is part of a series of investment programs to enhance people’s access to sustainable and modern energy services, with a focus on developing the eastern part of the country as a new growth hub. As part of the project, a strengthened electricity distribution system will help eight provinces across Nusa Tenggara and Sulawesi spur businesses and activities relying on a stable energy supply including agriculture, fisheries, small and medium-sized enterprises, as well as tourism.

(Source: Asian Development Bank)

Mitsubishi Heavy Industries To Supply Gensets To PT PLN

ENERGY - Indonesia
September 2017

Mitsubishi Heavy Industries Engine & Turbocharger, Ltd. (MHIET), a Group company of Mitsubishi Heavy Industries, Ltd. (MHI), has received an order for 147 units of its MGS Series gensets, the core lineup in the company’s diesel power plant offerings, from PT PLN (Persero), a state-owned electricity provider in Indonesia. The gensets are to serve as stand-alone power systems, a mode of power supply especially useful in Indonesia, a country comprising thousands of islands. Plans call for the units to progressively go into service in 22 districts of Kalimantan and Sulawesi by mid-2018.

The gensets on order are the MGS1500C, the central offering in MHIET’s MGS Series lineup. They provide a continuous output of 1.2 megawatts (MW), and due to their high-speed operation, their engines are small in size and light in weight for units delivering output of this scope. As a result, a large number of the MGS1500C gensets can be installed within a limited area of space—one of their foremost benefits for their users.

Manufacture and shipment of the 147 engines on order will be completed by the end of September. In Indonesia, Mitsubishi Heavy Industries Engine System Asia Pte. Ltd. (MHIES-A), a wholly owned MHIET subsidiary that markets and assembles engines and power systems within the Asia region, will procure the necessary generators and other related equipment and components. After all sets have been completed, PT Berkat Manunggal Jaya (BMJ), the local dealer for MGS Series finished gensets, will install gensets and perform test operations at 19 Kalimantan districts and 3 Sulawesi districts, followed by formal delivery to PLN. After the units go into commercial operation, MHIET will provide remote monitoring services for all installations from its Head Office in Sagamihara (Kanagawa Pref.), relying on ICT (information and communication technology).

(Source: Mitsubishi Heavy Industries Engine & Turbocharger, Ltd)

Government To Build More Renewable Energy Power Plants

ENERGY - Indonesia
August 2017

The Energy and Mineral Resources (ESDM) Ministry has announced that it is planning to develop 64 new and renewable-based energy power plants with the help of 53 independent power producers. The power plants are set to be constructed in the islands of Sumatra, Java, Sulawesi, and Nusa Tenggara. The plants are expected to be sources of different renewable energies, such as solar, micro-hydro and biomass energies. The planned construction will amount to a total of 400 megawatts (MW) power capacity that will help adequately supply Indonesian consumers of electricity. As petrol and fossil-based resources in Indonesia are depleting, the country is pushing for the use of renewable resources and is seeking energy investments that will benefit the country.

(Sources: Antara; Voice of Indonesia)

Indonesia Allocates USD 270 Million for Geothermal Exploration

ENERGY - Indonesia
July 2017

Indonesia has laid the groundwork for a USD 270 million fund to finance geothermal exploration, as part of the country's efforts to boost renewable sources of energy in the country. The government has allocated IDR 3 trillion ($USD 224 million) in its 2017 state budget for the so-called Government Drilling Fund, which will be used to finance geothermal exploration around Indonesia. World Bank, on the other hand, witll fund the other USD 55.3 million.

Sarana Multi Infrastruktur, the government's infrastructure investment arm, will be responsible for managing the fund under supervision of the ministries of finance and energy. Indonesia has about 29 gigawatts of geothermal capacity – the largest in the world – but high exploration costs and the risks involved often prove prohibitive for investors in the sector. Under the scheme, the government will conduct a survey of potential geothermal resources and drill exploration wells which are usually capital intensive. Indonesia is set to overtake the Philippines as the world's second largest geothermal power producer by 2018 after the United States.

(Source: Jakarta Post)

PGN Targets Batam To Become A Natural Gas City

ENERGY - Indonesia
June 2017

PT Perusahaan Gas Negara (PGN), an Indonesian state-owned company which distributes natural gas, is looking for investors to invest in Batam (which is located in the Riau islands), some 30 kilometers from Singapore. PGN Director has advised that they will continue to extend the infrastructure network by constructing the 13.5 km Subsea Gas Pipe Line from Tanjung Uncang in Batam to Pemping Island.

PGN will jack up natural gas supplies in Batam; volume of natural gas could be increased up to 100 BBtud in subsequent years. The reason is to provide alternative gas supply for the Riau Islands (which include Batam, Bintan and Karimun) and also to support the government program for national energy sustainability.

(Source: Netral News)

Indonesia Awards Contract For Floating Bridge With Tidal Power

ENERGY - Indonesia
May 2017

Tidal Bridge BV, a joint venture of Strukton International and Dutch Expansion Capital, has started the feasibility study for the Palmerah Tidal Bridge project in Indonesia. The Palmerah Tidal Bridge project has the National Strategic Project status, emphasizing the national interest. The project includes the construction of a floating bridge together with the world’s largest tidal power plant.

The first scope of the plan consists of the construction of the 800 meter Palmerah Bridge at Larantuka Strait, East Flores, and a tidal energy power plant with an installed capacity of 18 MW to 23 MW, providing energy for more than 100.000 people.

The combination of the bridge with the tidal energy power plant makes this project unique in its kind. The planned location, Larantuka Strait, is highly suitable for the generation of tidal energy due to the water flows, and makes it possible for local people to benefit from the bridge in multiple ways.

(Source: Tidal Bridge)

Indonesia Energy Ministry To Auction 12 Geothermal Areas in June

ENERGY - Indonesia
May 2017

The Indonesian government targets to increase the installed capacity of geothermal energy to 7,200 MW by 2025. In line with its plans, the Indonesian Energy and Mineral Resources Ministry is planning to offer 12 geothermal working areas to investors in June this year, by way of regular tender and direct offer.

According to the Ministry, five of the twelve working areas will be auctioned through regular tender, while seven of them will be offered directly to the state owned energy companies, namely PT Perusahaan Listrik Negara (PLN), PT Geo Dipa and PT Pertamina.

The five WKPs are WKP Muara Bulung in Southeast Sulawesi with potential capacity of 20 MW, Oka Iliange WKP in West Nusa Tenggara with potential capacity of 20 MW, Joilolo WKP in North Maluku with potential capacity of 60 MW, Simbolon Samosir WKP in North Sumatera with capacity of 220 MW and Sirung WKP located in Alor Island in East Nusa Tenggara with potential capacity of 10 MW.

(Sources: RambuEnergy)

Indonesia’s Nuclear Curiosity

ENERGY - Indonesia
May 2017

Power-short Indonesia has been mulling building a nuclear power plant for nearly 15 years, and it is exploring a number of novel options, including high-temperature gas-cooled reactors (HTGRs) and a thorium molten salt reactor.

According to, Indonesia’s National Atomic Energy Agency is interested to build an experimental nuclear power reactor at Serpong, which is the site of its largest multipurpose research reactor. It is a party to various agreements:

  • In 2015, the agency has signed a contract to build and test a pebble-bed HTGR at Serpong with a consortium of Russian and Indonesian companies led by NUKEM Technologies.
  • In 2016, it signed a cooperation agreement with China Nuclear Engineering Corp., looking to develop small HTGRs in Kalimantan and Sulawesi by 2027.
  • It also has agreements in place with Russia’s Rosatom to develop a floating nuclear power plant that could electrify its smaller inhabited islands.


Oman Invest US$ 7 Billion In Indonesia's Oil & Gas Sector

ENERGY - Indonesia
May 2017

According to Indonesia’s Energy and Mineral Resources, Omani investors are looking to invest up to USD 7 million in various oil and gas projects in Indonesia, which include developing oil and gas tanks, a refinery and a petrochemical plant. Plans are already progressing for the building of the refinery.

Indonesia is a net buyer of oil and gas; its demand for gasoline is about 150,000 barrels per day. The country currently produces 800,000 barrels of oil per day, however not all of it can be processed at its local refineries. According to the Minister, the country has “a dire need for about 600,000 – 700,000 bpd of both crude and refined products.” Indonesia hopes to buy crude oil from Middle Eastern producers at a lower price.

(SourceS: Jakarta Globe, EMerging Equity)

Indonesia Needs US$ 200 Billion Investment To Boost Energy Output

ENERGY - Indonesia
April 2017

Indonesia, a former OPEC member, has plans to attract investment as much as USD 200 billion to boost energy output. The Minister of Energy and Mineral Resources, Ignasius Jonan, has offered around 14 unexplored oil & gas blocks to foreign and domestic investors. The country is highly reliant on imported oil and gas, and is exploring ways to reduce this reliance. One of Indonesia state-owned companies in the oil sector is spending billions of dollars to boost output at its oil and gas fields. Indonesia has also partnered with Russian and Middle East companies to build refining facilities.

(Source: The Jakarta Post)

Indonesian President Inaugurates New Portable Power Plants

ENERGY - Indonesia
March 2017

Two mobile power plants (MPPs) have been inaugurated by the Indonesian President, Joko Widodo, including two 25 MW mobile power plants in Anyir Bangka and  one 25 MW mobile power plant in Suge Belitung. The Bangka and Belitung MPPs are part of eight MPPs located in various other regions, which have a combined capacity of 500 MW.

Unlike any other power plants, these power plants are not build in a permanent place, and the machines can be moved so as to allow more flexibility. Currently, the main energy sources for the MPPs are diesel or marine fuel oil, and plans are in place for the plants to switch to gas as the main energy source.

The President Director of state-owned electricity company PLN stated that the eight MPPs projects were finished in six months by Bright Batam, a subsidiary of PLN. Currently, around 71 of 109 projects are still in planning and procurement stages.

(Sources: Antaranews, The Jakarta Post)

Indonesian Potential Investment In Renewable Energy

ENERGY - Indonesia
February 2017

According to the Indonesian Energy and Mineral Resources Ministry, Indonesia has massive potential in renewable energy; its 28,994 MW are the largest geothermal reserves in the world. 13 potential regions have been identified: East Nusa Tenggara, Aceh, Papua, South Kalimantan, South Sulawesi, Maluku, Bangka Belitung, Riau, West Sumatra, and West Nusa Tenggara.

Under the ministerial decree 12/2017, state-owned enterprised PT PLN will have to use renewable energy in a bid to improve its efficiency and reduce its price to consumers. The renewable energy may be bought from power plants under the mechanism of fixed price or direct appointment. In addition, PLN will have to operate renewable energy power plants with a capacity of 10 MW. To attract investors, Indonesian Government has also prepared a scheme to provide incentives for investors.

Following this, Indonesia has also cooperated with Sweden in developing Indonesian renewable energy resources. According to the Indonesian Energy and Mineral Resources Minister, Ignatius Jonan, Indonesia expects more sophisticated technology for new and renewable energy, which will help to improve efficiency and reduce domestic electricity tariffs. Moreover, Sweden has previously built renewable energy-based power plants in Indonesia.

(Source: Antaranews)