Indonesia’s Energy Transition Project: BUMN Deputy Minister Reveals $85 Billion Program

Jakarta –

BUMN Deputy Minister Kartika Wirjoatmodjo opens up about the longest and biggest project in history. The project is an energy transition that will take 25 years and a capital expenditure (capex) of up to US$ 85 billion or approximately Rp. 1,377 trillion (exchange rate Rp. 16,200).

The man known as Tiko explained that he knows that the challenge in terms of energy transfer in Indonesia is that it does not currently have an inter-island grid. He said the electricity sub-system in Indonesia was still fragmented.

The challenge in developing renewable electrical energy is that there is a surplus of electricity in Kalimantan and Sumatra. At the same time, there is a demand for electricity in Java.

“This is a big challenge because currently Java’s base load is coal, it will take time to ensure that the transmission is connected first from Sumatra anyway, or if the future from Kalimantan and enough water geothermal production before we can do. the transfer effectively,” said Tiko at the BUMN 2024 Forum, Tuesday (30/4/2024).

He said that this energy transfer must be done carefully. According to him, the target for the electricity produced must be accessible to the community. Then, it is necessary to ensure that PT PLN (Persero) does not have financial problems.

He continued, his party wants to share the task with the government where the government invests in distribution.

“We will invest heavily in generation companies in the genco, actually 60% with private IPPs, 40% with internal genco companies, namely Indonesia Power and Nusantara Power,” he said.

Tiko said this program is the longest and biggest in Indonesia. This program will last for almost the next 25 years.

“So this is probably the longest and largest program in our country, this program will run for almost the next 25 years. The hope is that we will review it later every year and make sure that this energy transfer program runs well,” he said.

He said that this program will have a wide impact on the economy. He said the capex requirement for this program is US$85 billion.

“This program is very comprehensive and very comprehensive. I think in the future the economic impact will also be amazing, we estimate that the required capex may be around US$ 85 billion in total, of course this will bring new economic change over several years. time,” he said.

(acd/rrd)