Investor Presentaiton

REGULATION Pres. Reg No. 35/2018: 13.35 ct/kWh, a burden for PLN consumers This regulation is the replacement of Pres. Reg No. 18/2016 that was annulled by the Supreme Court in January 2017. According to this regulation, waste to energy (WTE) plants in 12 cities with severe waste problems will get special pricing at 13.35 cents/kWh for the electricity they generate. This price is about twice the prices defined in MEMR Reg No. 50/2017. Delays in PPA signing Since the stipulation of the regulation, no WTE PPA has been signed yet. A project in Solo, for instance, has been delayed several times, waiting for the PPA to be signed by PLN. One WTE plant in Bekasi has been in operation since late 2017 but having yet to connect to the grid due to delayed PPA. Costly technology A WTE plant is costly. One planned project in Sunter, Jakarta agreed on an IDR 500,000 tipping fee, much higher than the standard tipping fee of IDR 150,000 currently charged for landfill. On top of that, PLN also has to pay for the electricity produced at high tariffs. As a result, PLN's consumers will pay more for the technology. Shortcut solution Some environmental organizations criticized the regulation and believed that this is only a shortcut solution for the government to deal with chronic waste problems in Indonesia. The argument says that if the government wants to reduce waste production, the cost of WTE plants should be mostly imposed on the tipping fee. This would likely discourage people to produce more waste. There is also a concern on the impact of WTE plants on health. IESR (Institute for Essential Services Reform) | www.iesr.or.id 18

View entire presentation