Waste-to-energy projects in Indonesia

As with most parts of the developed and developing world, countries have been signing up in recent years to switching to green or renewable sources of energy.

Indonesia is one such country, and one step which Indonesia has taken in that direction has been by promoting waste-to-energy projects.

In 2018, regulation was passed with a view to promoting or facilitating waste-to-energy projects in certain specific parts of Indonesia[1]. Like a number of government-linked infrastructure projects in Indonesia in recent times, procurement for these new projects is likely to be via a public-private partnership, commonly referred to as ‘PPP’[2]. The tariff system introduced is not dissimilar to the system used in the power sector; there is a fixed and a variable component to the tariff payable.  

Notwithstanding that the capacity of each project is small, it is anticipated that a number of waste-to-energy projects will be tendered in 2021, and the aggregate capacity of these new projects is expected to be more significant.

Readers may also want to access and review the Waste-to-Energy Guidebook published for investors interested in tendering for any of the waste-to-energy projects in Indonesia[3].

For further information about the waste-to-energy tendering procedure, the projects being mooted, and/or the applicable regulatory framework, please contact allbless@inarakconsultants.com.

This blog is for information purposes only. It is not intended to constitute legal advice.

DECEMBER 23, 2020

For legal advice on this subject, please contact allbless@inarakconsultants.com

[1] PR No. 35 of 2018 on Acceleration of the Development of Municipal Waste to Energy Power Plants.

[2] On the subject of procurement of waste-to-energy projects, see also Regulation No. 4 of 2020 published by the Ministry of Energy and Mineral Resources.

[3] Published by the Ministry of Energy and Mineral Resources. The Guidebook is useful in order to better understand the Indonesian government’s proposed risk allocation between the public and the private sector in a waste-to-energy project. Significantly, the private sector will take the risk in unforeseen ground conditions, tariff estimates, and a number of operational matters.

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