Investor Presentaiton
2019 OUTLOOK
Investment climate is unlikely to change, investors wait
and see
Indonesia will face the presidential election in 2019. We anticipate that the current government will make no significant changes in policy and
regulatory instruments to accelerate renewables. The electricity tariff is a key factor that could drive renewable energy investments. As the
electricity tariff issue is political in Indonesia, we expect the government to keep the electricity tariffs low next year. As a result, PLN will
continue to push renewables investors to provide low-tariff renewables-based electricity in accordance to Regulation 50.
There is some information on MEMR's intention to revise the Ministerial Regulation No. 50/2017. While the official announcement has not
made yet, there is potential to raise some key issues such as tariffs, BOOT scheme, and procurement mechanism in this amendment process.
However, stakeholders should keep expectations low as the revision of Regulation 50 would not immediately address all bankability issues as
there are still issues with Reg. No. 10/2018. Unless this regulation is also revised, we expect to see no significant increase in investors
confidence in the Indonesian renewables sector.
Investors, notably foreign ones, are likely to wait and see until the new cabinet is formed in the last quarter of 2019. In this period of time, we
expect to see more clarity on the new administration's priorities and direction in the energy sector.
IESR (Institute for Essential Services Reform) | www.iesr.or.id
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