Private Sector to Manage 60% of Indonesia's Power Projects

Indonesia is making a significant move to involve the private sector in its energy infrastructure development. Minister of Energy and Mineral Resources, Bahlil Lahadalia, recently announced that 60% of the country's upcoming power plant projects will be managed by private investors. This shift was revealed during the inauguration of the Jatigede Hydroelectric Power Plant (PLTA) in Sumedang, West Java, on January 20, 2025.

Under the 2025-2034 Electricity Supply Business Plan (RUPTL), Indonesia aims to increase its electricity capacity by 71 gigawatts (GW). According to Minister Bahlil, the private sector's involvement will mainly be facilitated through Independent Power Producers (IPPs), entities responsible for funding, building, and operating power plants. This approach aligns with President Prabowo Subianto's vision of achieving 8% economic growth and energy self-sufficiency within five years.

Out of the planned 71 GW, 70% will come from renewable energy sources, including solar, wind, and hydroelectric power. This focus on clean energy demonstrates Indonesia's commitment to transitioning from fossil fuels and meeting its ambitious carbon neutrality target by 2060. The government also plans to enhance its transmission network to integrate renewable energy projects efficiently.

The Jatigede Hydroelectric Power Plant, which played host to this announcement, symbolizes Indonesia’s renewable energy potential. The facility is part of the government’s broader efforts to boost sustainable energy production. It is designed to harness hydropower effectively, a key component in Indonesia’s renewable energy strategy.

However, challenges remain in achieving these ambitious goals. Currently, Indonesia’s installed power capacity stands at 101 GW, with renewables accounting for only 15%. To close this gap, the government needs to address various issues, including regulatory barriers, financing, and infrastructure readiness.

Minister Bahlil emphasized that the private sector would not operate independently but in alignment with government initiatives. “It is not the private sector that makes additional movements outside of what the government does,” he stated. This collaborative framework ensures that private investments support Indonesia’s national energy goals while fostering economic growth.

The involvement of private players is expected to bring not only financial resources but also advanced technologies and management expertise. This is crucial for Indonesia to scale up its renewable energy projects and reduce dependence on coal. Moreover, the initiative creates significant opportunities for foreign and local investors in the energy sector.

With a clear roadmap outlined in the RUPTL, Indonesia is positioning itself as a leader in renewable energy development within Southeast Asia. The success of this plan will depend on effective policy implementation, strong public-private partnerships, and continued investment in renewable technologies.

By prioritizing sustainability and leveraging private sector involvement, Indonesia aims to secure its energy future while contributing to global efforts to combat climate change.