Renewable Energy Webinar · opportunities for FDI into Indonesia according to Canadian investors....
Transcript of Renewable Energy Webinar · opportunities for FDI into Indonesia according to Canadian investors....
Renewable Energy Webinar November 1st, 2016
Dr. Henry Loewendahl, CEO WAVTEQ
Mr. Scott Bryan, Executive Director Client Services, ROI [email protected]
Indonesia Investment Coordinating Board
Contents• Introduction 3• Solar sector 9• Biomass sector 14• Hydroelectricity sector 20• Geothermal sector 24• Wave & Tidal sector 29• Indonesia’s competitiveness 31• About BKPM 41• Appendix 1: BKPM investor support 46• Appendix 2: FDI regulations 53• Appendix 3: Feed-in tariffs 59
Indonesia Investment Coordinating Board
Introduction
Indonesia Investment Coordinating Board
About Indonesia
Indonesia’s GDP will increase by over 150% to $2.2 trillion by 2025 –close to Canada’s
Indonesia has the 4th
largest population in the world (261 million as of August 2016)
Indonesia is one of the fastest growing economies in the world in the world (>5% p.a. 2012-16)
Access to the $2.5 trillion ASEAN market with a population of 620 million
Indonesia Investment Coordinating Board
Canadian investment in Indonesia
invested by Canadian firms
in Indonesia
of Canadian investors in Indonesia are
planning to re-invest in Indonesia
(WAVTEQ, June 2016 survey)
of Canadian investors in Indonesia would recommend other
Canadian companies to invest in Indonesia
(WAVTEQ, June 2016 survey)
Renewables was the sector with the best opportunities for FDI into Indonesia according to Canadian investors.
Indonesia Investment Coordinating Board
Why invest in the energy sector?
The government is targeting private sector energy investment of $80 billion by 2025
Up 60 gw of private power plants will be approved by 2025
Track record
$10 billionFDI in the energy related
sector in the last five years (2011-15)
Demand for energy
7.7% increase per annum
through to 2020
Indonesia Investment Coordinating Board
Demand for energy in Indonesia• Energy consumption increased by almost 150% from 2005-2014
• Electricity generation is forecast to increase by >50% from 2015-2020
Final energy consumption, thousand barrel oil equivalent, Indonesia, 2005-2020
Source: WAVTEQ based on Ministry of Energy and Mineral Resources- Handbook of Energy and Economic Statistics 2015 and EIU
0
500000
1000000
1500000
2000000
2500000
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
1000’s
Indonesia Investment Coordinating Board
Support for renewable energy
The government meet has a target of 25% of energy from renewable sources by 2025
BKPM is targeting $100 billion of green investment by 2019
In total, the Indonesian government has proposed 508 power projects (conventional and renewable) from 2015-19
Renewables
Indonesia Investment Coordinating Board
Solar sector
Indonesia Investment Coordinating Board
Indonesia’s solar sector
Growth in solar investment
$3.8 billion in solar energy projects targeted
from 2015 to 2025
Solar auction
90+ Solar PV / diesel hybrid projects
to be auctioned in 2018
Government support
1.4 GWnational target installed solar
photovoltaic capacity by 2025
An estimated US$3.8 billion of investment will be required from 2015 to 2025.
Indonesia Investment Coordinating Board
Solar investment potential in Indonesia
Most of Indonesian receives high intensity of solar radiation, with the average daily radiation about around 4 kWh/m.
Solar photovoltaic capacity and electricity generation target, Indonesia, 2015-2025
Source: BKPM http://www.all-energy.co.uk/__novadocuments/81855?v=635646359979030000 –
As an archipelagic country, thousands of islands do not have access to electricity (27% of the population is still off the grid)
Indonesia Investment Coordinating Board
Planned solar projectsPLN’s Solar PV Development Program
Source PLN / Asian Development Bank 2015
Indonesia Investment Coordinating Board
Solar case studies
In January 2015, Canadian Solar Inc. (CSI) announced a 30 mw solar manufacturing plant in Indonesia with $70 million funding secured from the IFC.
At the end of 2015, construction was finished on Indonesia’s largest Solar Power Plant in Kupang, Oelpuah village. LEN Industri builds and operates the plant with its own funding of approximately US$11.2 million
Indonesia Investment Coordinating Board
Biomass
Indonesia Investment Coordinating Board
Indonesia’s biomass sector17.6% 5.0% 8.5% 71.2% 50000 MW
Of primary energy supply from biomass
Of primaryenergy supply from bio-fuel
Of industrial energyrequirements from biomass
Of household energyrequirements from biomass
Biomass power generation potential
Indonesia Investment Coordinating Board
Biomass – energy supply
240000
250000
260000
270000
280000
290000
300000
310000
320000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Primary energy supply of biomass, Indonesia, thousand BOE (2005-2014)
Source: Ministry of Energy and Mineral Resources- Handbook of Energy and Economic Statistics 2015
Indonesia Investment Coordinating Board
Government support
25% $100 bn 508 Feed-in-tariff
Target of energy from renewable sources by 2025
Investment in green energy by 2019
Proposed powerprojects from 2015 to 2019
To encourageinvestment in renewable energy
Waste to energy Partnership Incentives
Strong focus by government to encourage use of waste from domestic, agriculture and wood
Waste-to-Energyscheme in partnership with organisations including EU
Strategic Policies, incentives and regulations to promote use of solid waste from municipalities
Indonesia Investment Coordinating Board
Case studies
Sinar Mas, through its subsidiary Asia Pulp & Paper (APP), is investing around USD780 million to develop 10 biomass power plants over the next eight years with a total generating capacity of 1000 mw.
Louis Dreyfus Company has established a bio-fuel plant in Lampung province in Sumatra, with the capacity to produce 470,000 million tons of bio-fuel annually.
Indonesia Investment Coordinating Board
Biomass waste heat recovery firms
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Hydroelectricity
Indonesia Investment Coordinating Board
Hydroelectricity
1. Potential for hydroelectricity•Installed capacity is 5.9 GW•Potential capacity is 75.6 GW
2. Growth in Hydroelectricity investment•Indonesia is targeted 26 new hydro power plants•11 hydro projects are in various stages of appointment or construction
3. Government support for Hydroelectricity•Feed-in tariffs have been introduced for Hydroelectricity•The government is targeting 8.3 GW of hydropower by 2024
Indonesia Investment Coordinating Board
Hydroelectricity consumption
1,068 1,101
1,456 1,479 1,5221,556 1,599
1,641 1,683 1,726
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Gross domestic energy consumption (KTOE)*, Indonesia, 2011-2020
Source: Economist Intelligence Unit Energy Indicators & Forecasts *Kilotonne of oil equivalent (KTOE)
Indonesia Investment Coordinating Board
Hydroelectricity case study
Vale Brazil)
• Responsible for the running of three hydroelectric power plants:– Larona- operations commenced in 1979, consists of three turbines with
power capacity of 165 MW
– Balambano- consists of two turbines with power capacity of 110 MW and operations began in 1999
– Kerebbe- newest of the three plants, began operations in 2011, with two turbines and capacity of 90 MW
• Main use of this energy is to increase nickel production by prioritizing cost efficiency
• Contributes 34% (10.7 MW) of their energy to Perusahaan Listrik Negara (PLN), the state owned electricity distributor
Indonesia Investment Coordinating Board
Geothermal
Indonesia Investment Coordinating Board
Geothermal sector in Indonesia
1. Indonesia has exceptional volcanic activity and is believed to harbour around 40% of the planet’s geothermal potential, with estimated resources and reserves totaling 28,000 megawatts (MW)
2. Sumatra holds most of these, followed by Java3. Current government planning is to boost installed
capacity to 6500 MW by 2025, up from some 1340 MW that were on stream in early 2014 (with projects for another 1500 MW in development)
4. Unlike most other forms of electricity generation, geothermal is dominated by IPPs (non-SOEs)
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Geothermal sites
299 identified potential geothermal locations
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Geothermal case studies
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Wave and tidal
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Wave and tidal energy
1. Indonesia has an ocean area reach out of 5,000,000 km22. This is biggest archipelago country in the world and has
great ocean energy potential3. Ocean wave energy had the theoretical potency 510 GW,
the technical potency 2 GW, and the practical potency 1,2 GW (BPPT, 2014)
4. The Energy and Mineral Resources Ministry of Indonesia has announced plans for the development of wave and current power plants in the country
5. Pilot projects started in 2015
Indonesia Investment Coordinating Board
Wave and tidal energy case studiesSabella, French tidal energy developer, signed an MOU with PLP and MEINDO to supply tidal turbines from 100 kW to 2.500 kW in capacity that would power remote areas of Indonesia
Akuo Energy and Pertamina have also signed an MoU for developing renewable energy projects, including OTEC plant, at various sites in Indonesia
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Indonesia’s competitive
position
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Size of market
0
500
1000
1500
2000
2500
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Indonesia
Philippines
Thailand
Malaysia
Vietnam
Singapore
Indonesia’s GDP 2025 forecast:• Increase >150% to $2.2 trillion• Larger than India’s in 2015• Nearly same size as Canada’s ($2.6 tn)• GDP/capita: $3370 (2015) to $7840
GDP 2011-2025, US$ billion (EIU forecasts)
Indonesia Investment Coordinating Board
Size of population
6
31
69
92
101
255
7
36
70
103
128
308
0 50 100 150 200 250 300 350
Singapore
Malaysia
Thailand
Vietnam
Philippines
Indonesia
Population projection (mid-2030, Millions) Population (2015, Millions)
Source: fDi Benchmark (IMF and Population Reference Bureau World Population Data Sheet)
Population by country, 2015-2030
Indonesia’s population is the 4th largest in the world and will increase to over
300 million people
Indonesia Investment Coordinating Board
Skilled workforce
Source: fDi Benchmark (Global Competitiveness Report, World Economic Forum, Switzerland, 2015-16 )
Availability of Scientists and Engineers – out of 7 (2015)
3.9
4.0
4.2
4.3
4.5
4.6
3.4 3.6 3.8 4 4.2 4.4 4.6
Vietnam
Philippines
India
Thailand
China
Indonesia
Indonesia Investment Coordinating Board
Available workforceUnemployment rate, 2015-2020
3.6%
6.0%
4.1%
3.2%
2.4%
2.0%
0.8%
5.9%
8.4%
6.0%
4.0%
2.9%
2.9%
1.9%
0.8%
6.3%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
India
Philippines
China
Malaysia
Vietnam
Singapore
Thailand
Indonesia
Forecast Unemployment Rate in 2020 (%) Unemployment Ratein 2015 (%)
Source: fDi Benchmark (Economist Intelligence Unit March 2016 & International Monetary Fund 2016)
Indonesia’s has the least tight labour force in ASEAN
Indonesia Investment Coordinating Board
Low taxes
Total Tax Rate (% profit) in 2015
61%
68%
43%
40%
39%
28%
30%
0% 10% 20% 30% 40% 50% 60% 70% 80%
India
China
Philippines
Malaysia
Vietnam
Thailand
Indonesia
Source: fDi Benchmark (World Bank Doing Business 2016)
Indonesia’s has low effective tax rates
Indonesia Investment Coordinating Board
Labour costs for production positionsLabour costs by country for production positions, USD, 2015*
$10,277
$807
$7,672
$6,938
$5,562
$4,963
$5,748
$8,301
$5,156
$5,294
$4,807
$4,938
$4,422
$4,493
$5,814
$3,465
$2,947
$1,424
$2,273
$2,297
$2,490
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000
China
Malaysia
Thailand
India
Philippines
Vietnam
Indonesia
Production Operative (Unskilled) Production Operative (Skilled)
Production Operative (Highly Skilled)
Source: fDi Benchmark. Note: Singapore labour costs are $13,323 for unskilled, $26,086 for skilled, and $32,907 for highly skilled). *Includes wages and statutory social insurance costs paid by employer
Indonesia’s has highly competitive
labour costs
Indonesia Investment Coordinating Board
Labour costs for engineering positions
Labour costs by country for an engineer, USD, 2015*
Source: fDi Benchmark
Indonesia’s has highly competitive
labour costs
57537
24030
15893
15840
15552
13801
12000
11029
0 10000 20000 30000 40000 50000 60000 70000
Singapore
China
India
Malaysia
Thailand
Indonesia
Philippines
Vietnam
Indonesia Investment Coordinating Board
InnovationTotal of Patent applications, non-residents (foreign investors) (2014)
3255
3960
6267
6924
9009
7321
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Philippines
Vietnam
Malaysia
Thailand
Singapore
Indonesia
Source: fDi Benchmark (World Bank World Development Indicators)
Indonesia Investment Coordinating Board
Low cost of living
Cost of Living Index, 2015*
Source: fDi Benchmark *Rating 0-10 (0=lowest cost of living; 10=highest cost of living) (2014)
5.7
3.28
2.22
2.14
1.86
1.82
1.4
1.79
0 1 2 3 4 5 6
Singapore
China
Malaysia
Thailand
Philippines
Vietnam
India
Indonesia
Indonesia Investment Coordinating Board
About BKPM and support services
for investors
The Indonesia Investment Coordinating Board (BKPM) 42
BKPM The Indonesia Investment Coordinating Board
As the primary interface between business and government, BKPM is
mandated to boost domestic and foreign direct investment through creating a conducive investment climate.
BKPM was restored to Ministerial status in 2009, and reporting directly to the President of the Republic of Indonesia.
This investment promotion agency’s goal is not only to seek more domestic and foreign investment, but
also to seek quality investments that improve
social inequality and reduce unemployment.
The agency works as a proactive advocate for investments as well as a matchmaker for investors.
Who we are
ABOUT BKPM
The Indonesia Investment Coordinating Board (BKPM) 43
About BKPM
What We Offer to Investors? Simplification of business start up and licensing procedures, including
the “one-stop shop” (PTSP) licensing provision at BKPM, 60% reduction of application forms (from 38 to 15 forms).
Establishing an Investor Relation Unit at BKPM for information, facilitation and queries handling from existing and potential investors.
Rolling-out of Electronic Information Services and Investment Licensing (SPIPISE) in 105 PTSP throughout Indonesia.
Helping contain various obstacles and giving consultation on problems investors face in the conduct of investments.
Facilitating foreign workers permit.
Launching of investment tracking system and followed by its
implementation in other Ministries and Regional Governments.
Our services for investors
One-Stop Service
(PTSP) at BKPM
One place
22 ministries integrated
3-hourService
DirectConstruction
90%Regional PTSP formed. 61% regional PTSP
implement e-licensing.
Industry, power, oil & gas, tourismat one place
All sectors
162 permits are delegated
to BKPM One-Stop Integrated Services
Improvement of Investment Service
The Investment Coordinating Board of the Republic of Indonesia
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Badan Koordinasi Penanaman Modal (BKPM)
Indonesia Investment Coordinating Board
Jl. Jenderal Gatot Subroto No. 44Jakarta 12190 - Indonesia
t . +62 21 525 2008
f . +62 21 525 4945
www.bkpm.go.id
Indonesia Investment Promotion Centre (IIPC)
Thank You
Indonesia Investment Coordinating Board
Appendix 1: BKPM support services for
foreign investors (detailed)
The Indonesia Investment Coordinating Board (BKPM)
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BKPM
• Arrive at One-stop Integrated Service at BKPM directly from the airport.
• Consult with Director of Investment Service.
• Submit the required documents & data.
8 permits obtained + 1
Wait at the lounge while documents are processed by BKPM, in-house notary, ministries, & other government institutions.
Obtain eight documents & letter of land availability within three hours to start your business.
Certainty to work• RPTKA / Employment plan• IMTA / Working permit
Certainty to start a business• Investment license• Certificate of incorporation• NPWP / Tax registration• TDP / Company registration
Certainty to import capital goods• APIP / Import identification• NIK / Customs registration
Accurate land Information• Letter of land availability
Investment Service Reforms
3-hour Service (I23J)Available for investors with minimum (new
or expansion project) investment of IDR 100 billion (USD 8 million) and/or employing
1,000 local workers.
Or supplier of the existing manufacturing company with minimum investment of IDR
100 billion (USD 8 million) and/or employing 1,000 local workers.
No requirements for investment in infrastructure sector.
Source: Chairman BKPM Reg. No. 6/2015 on Priciple License
The Indonesia Investment Coordinating Board (BKPM)
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3-hour Investment Licensing Service for Infrastructure
No Minimum investment or workers requirement
Currently there are three sectors is eligible and one
documents can be obtained with
three-hour service.
Investment Priority Service
Ministry of Energy and Mineral Resources (MEMR) Regulation No. 15 of 2016 regarding three-hour license service in Energy and Mineral Resources. Sectors/license that is available:• Geothermal sector (IPB),• Electricity producer (IUPTL-S),• Electricity transmission sector (IUPTL-S),• Temporary downstream oil and gas business licenses.
The Investment Coordinating Board of the Republic of Indonesia
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Direct Construction (KLIK)No Requirements
•No minimum investments or workers is required.
•Available for selected industrial parks. •Construction permits can be obtained in parallel with construction process.
Investors can directly start their project construction before obtaining construction permits. This service is
supported by both Central and Regional Governments.
Obtain investment licence at One-stop Integrated Service (PTSP) at national or regional level.
• Survey a land within selected 14 industrial parks (in North Sumatera, Banten, West Java, Central Java, East Java and South Sulawesi).
• Acquire the land for your industry.
• Start the construction of your project. No other permits are required.
• Apply for building construction permit/IMB & environmental permit, and other regional licenses in parallel with construction process.
Priority Investment Service
The Investment Coordinating Board of the Republic of Indonesia
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The Investment Coordinating Board of the Republic of Indonesia
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No Industrial Estate Sell Price USD/M2
Lease Price USD/M2
Total Area(ha)
Available Area (ha)
1 Java Integrated Industrial and Port Estate 150 7.5/year 2,993.27 1,761.4
2 Kendal Industrial Park 110 3.5/month 2,700 860
3 Bukit Semarang Baru Industrial Estate 193 - 115 40
4 Wijayakusuma Industrial Estate 115 2.4 – 3.1/month 250 100
5 Karawang Industrial City (KIIC) Negotiable Negotiable 1,470 293
6 Bekasi Fajar Industrial Estate 269 5.76/month 1.500 300
7 Delta Silicon 8 Industrial Park 223 - 230 158
8 GT Tech Park at Karawang Industrial Park 170 – 220 - 400 100
9 Suryacipta City of Industry 170 7.25/month 1.400 100
10 Krakatau Industrial Estate Cilegon 150 - 200 3.5 – 4/month 1,152 563
11 Modern Cikande Industrial Estate 152 - 3,175 1,975
12 Wilmar Integrated Industrial Park 150-175 15-20 /year 1.748 800
13 Medan Industrial Estate 144 2.4/month 780 100
14 Bantaeng Industrial Park 4-15 - 3.000 3.000
Industrial Estate with KLIK Facilities (data maychange anytime , exclude 10% VAT)
The Indonesia Investment Coordinating Board (BKPM) 52
Import Facility for Capital Goods
Acceleration and certainty in custom clearance processFaster & Certain•Capital goods do not require screening.•Cutting the processing time from 3-5 days to only 30 minutes.
Simple requirements • Projects under construction • Obliged in reporting quarterly
investment activities (LKPM) • Recommendation from BKPM
CUSTOMS CLEARENCE
Four customs checking status:
•Red lane is for new
companies.Physical & document checks before transported from ports.
•Yellow laneDocument check before goods transported from ports.
•Green laneDocument check after goods transported from ports.
•Main Partner Priority for companies
with proven track record. No checking required.
New Facility:
Status upgrade from red to green lane for new companies under construction
Improvement of Investment Climate
Indonesia Investment Coordinating Board
Appendix 2: Foreign
investment regulations
The Investment Coordinating Board of the Republic of Indonesia
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Law No25/2007 on InvestmentPresidential Reg. No. 39/2014 on Negative Investment ListChairman BKPM Reg. No.14 & 15/2015 on Investment Licensings
The Investment Coordinating Board of the Republic of Indonesia
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56
The Indonesia Investment Coordinating Board (BKPM)
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TAX ALOWANCE
Based on Government Regulation No. 9/2016, MoF Regulation No. 89/PMK.010/2015 and Chairman ofBKPM Regulation No. 18/2015, investment in new and renewable energy as Power Producer (KBLI 35101) iseligible for income tax facilities of:a.A reduction in net income of up to 30% of the amount invested, pro-rated at 5% for six years of thecommercial production, provided that the assets invested are not transferred out within six years.
b.Acceleration of depreciation & amortization for building and non-building.
c.A reduction of income tax on dividends paid to non-residents to 10% or lower rate according to doubletaxation avoidance agreement.
d.Extension of tax losses carry forwards for 5 years and up to 10 years (if it meets certain criteria).for 5 yearsand up to 10 years (if meet certain criteria).* Tax Allowance application is submitted to OSS-BKPM and will be processed in 25 days.
TAX HOLIDAY
Based on Government Regulation No. 94/2010, MoF Regulation No. 159/PMK.011/2015, and Chairman ofBKPM Regulation No. 19/2015, corporate income tax exemption for the period of 5 to 15 years from thestart of commercial production is granted for company with minimum investment project value of IDR 1Trillion (approx. USD 69 Million) in 9 priority “pioneer industries” including infrastructure not under PPPscheme, for example renewable energy power plant.* Tax Holiday application is submitted to OSS-BKPM and will be processed in 45 days.
IMPORT DUTY EXEMPTION
Based on Minister of Finance (MoF) Regulation No. 66/PMK.010/2015, , and Chairman of BKPM RegulationNo. 16/2015, all green-field or expansion investment of power plant for public usage (not includingtransmission, distribution and supporting services) are granted import duty exemption on importedmachineries and equipment (for 2 years) for the company usage during construcktion period, provided thatthey are not or inadequately produced in Indonesia.* Import Duty Exemption application is submitted to OSS-BKPM and will be processed in 5 days.
Feed-in Tariff (FIT) or Ceiling Price (CT)
FIT is a policy mechanism which obligates the State Electricity Company (PLN) under PPA withoutnegotiation and further price escalation to purchase the electricity generated from mini/micro hydro,bionergy (biomass/biogas), solar PV and municipal waste, at a regulated/incentivized price.
CP is another policy mechanism which regulates maximum offering price submitted by biddingparticipants (IPPs) during the procurement of hydropower and geothermal as well as coal-fired, gas,machine-gas power plants, before winning bidder to be awarded PPA with PLN.
Selling tariffs for electricity generated from other new & renewable energy sources like wind, marineenergy, OTEC, nuclear and others, which is (currently) not regulated under FIT or CP schemes, are basedon B2B negotiation with PLN.
INVESTMENT INCENTIVES FOR ELECTRICITY SECTOR
The Investment Coordinating Board of the Republic of Indonesia
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1. Right of Ownership (“Hak Milik”) Certificate; freehold, only applied for Indonesian individuals.
2. Right to Manage (Hak Pengelolaan or “HPL”) Certificate; leasehold, only applied for Indonesian state-owned or regionalgovernment-owned enterprises.
3. Right to Cultivate (Hak Guna Usaha or “HGU”) Certificate; leasehold• Entitled for Indonesian Limited Liability Company (local, foreign, JV) to cultivate, harvest and own agribusiness products on the
purchased land.• Granted for the period of 35 years, can be extended to another 25 years, and renewable to 35 years.
4.Right to Build (Hak Guna Bangunan or ”HGB”) Certificate; leasehold• Entitled for Indonesian Limited Liability Company (local, foreign, JV) to build and own all
buildings and facilities on the purchased land.• Granted for the period of 30 years, can be extended to another 20 years, and renewable to 30
years.
5. Right to Use (“Hak Pakai”) Certificate; leasehold• Entitled for any Indonesian Limited Liability Company (local, foreign, JV), foreign individuals, foreign representative to use land
and own all buildings and facilities on the purchased land for office or house.• Granted for the period of 25 years, can be extended to another 20 years, and renewable to 25 years.
* The land titles are registered at the Regional Land Office (subordinate of the National Land Office, Badan Pertanahan Nasional or“BPN”).** Land transaction must be processed by a Land Deed Official (Pejabat Pembuat Akta Tanah or “PPAT). Most notaries are PPATofficials but PPAT officials need not be notaries. In rural areas, PPAT officials are often local government officials, such as the “camat”(a district head) or the head of the Regional Land Office, who has jurisdiction in the district in which the property is situated.
(Agrarian Law No. 5 1960)
LAND TITLE REGISTRATION
58Indonesia Investment Promotion Centre (IIPC) - Overseas Representative of Indonesia Investment Coordinating Board (BKPM) in London, UK
Law No 30/2009 on Electricity“Both public and private sectors are allowed to participate on power generation, transmission, distribution, sales of electricity as IPPs (Independent Power Producers), PPUs (Private Power Utilities) or CPPs (Captive Power Plants).”
* PPUs must hold a “Business Area Approval” (Penetapan Wilayah Usaha) to generate, transmit, distribute electricity to their owncustomer base (such as tenants of an Industrial Estate). PPUs may sell excess capacity to PLN or directly to end-customer, subjectto the approval of the relevant Minister, Governor or Mayor/Regent (which is likely in remote areas where customers are notconnected to the PLN’s grid). PPU may rent PLN’s grid (transmission & distribution) under “Power Wheeling” mechanism.
President Regulation No 44/2016(popularly known as Negative Investment List)Electricity Sectors Maximum Foreign Share Ownership Specific
Licences
Power Plant: IPP/PPU/CPP (KBLI: 35101)
< 1 MW Closed for FDI IUPTL-S & IUPTL-T (only
for IPP & PPU), PWU
(only for IPP), IO / SKT /
Laporan (only for CPP, SLO
1 – 10 MW 49 %
=< 10 MW 67 % (for Geothermal Power Plant)
> 10 MW 95 % (for non PPP project) or 100% (for PPP project during concession period)
Transmission (KBLI: 35102) 95 % (for non PPP project) or 100% (for PPP project during concession period)
Distribution (KBLI: 35103) 95 % (for non PPP project) or 100% (for PPP project during concession period)
Consultant (KBLI: 71102) 95% IUJPTL
Construction/EPC (KBLI: 42213) 95% (for Power Plant), 49% (for Transmission), Closed for FDI (for Distribution)
Operation & Maintenance/O&M (KBLI: 43211) 95%
Inspection & Testing (KBLI: 71204) 49% (for Power Plant & Transmission), Closed for FDI (for Distribution)
BUSINESS MODEL FOR ELECTRICITY
Indonesia Investment Coordinating Board
Appendix 3: Feed-in tariffs
60
The Indonesia Investment Coordinating Board (BKPM)
Feed –in Tariff (FIT)Mini/Micro Hydro Power Plant (PLTM/PLTMH)
Source: MEMR Regulation No 19 of 2015.
No Region Feed-in Tariff (cent USD/kWh)
River Flow Using dam and/or irrigation channel)MV (up to 10 MW) LV (up to 250 kW) MV (up to 10 MW) LV (up to 250 kW)Y1-Y8 Y9-Y20 Y1-Y8 Y9-Y20 Y1-Y8 Y9-Y20 Y1-Y8 Y9-Y20
1 Java, Bali & Madura 12 7.5 14.4 9 10.8 6.75 13 8,12 Sumatra 13.2 8.25 15.84 9.9 11.88 7.425 14.3 8.913 Kalimantan &
Sulawesi14.4 9 17.28 10.8 12.96 8.1 15.6 9.72
4 West & East Nusa Tenggara
15 9.375 18 11.25 13.5 8.4375 16.25 10.125
5 Moluccas & North Moluccas
15.6 9.75 18.72 11.7 14.04 8.775 16.9 10.53
6 Papua & West Papua 19.2 12 23.04 14.4 17.28 10.8 20.8 12.96
Note: FIT is levelized base price on generation bus bar applied after Commercial Operation Date (COD); including interconnection cost; with contract duration of 20 years; and based on:
grid connectivity: to MV (Medium Voltage, 20 kV) or LV (Low Voltage, 220 V), and operating years: Y1-Y8 (year 1st until year 8th) and Y9-Y20 (year 9th until year 20th ).
The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase electricity generated by Independent Power Producer (IPP) decided as “PLTMH Developer” by DG NREC-MEMR.IPP should refers to National Electricity Master Plan (RUPTL) 2016-2025.
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The Indonesia Investment Coordinating Board (BKPM)
Ceiling Price(CP)Geothermal Power Plant (PLTP)
Note: Region I: PLTP located in Sumatra, Java and Bali.Region II: PLTP located in Sulawesi, Nusa Tenggara, Halmahera, Mollucas, Papua and Kalimantan.CP is levelized base price on generation bus bar applied after Commercial Operation Date (COD); not including price escalation and interconnection costs; with contract duration of 30 years.The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase electricity generated by Independent Power Producer (IPP) winning IUP (Geothermal Mining License) through WKP (Geothermal Working Area) Open Tender mechanism held by MEMR, Governor or Mayor/Regent.IPP should refers to National Electricity Master Plan (RUPTL) 2016-2025.
Source: MEMR Regulation No 17 of 2014.
Year of Commercial Operation Date
(COD)
Feed-in Tariff (cent USD/kWh)
Region I Region II Remote areas which are situated in Region I & II
2015 11.80 17.00 25.40
2016 12.20 17.60 25.80
2017 12.60 18.20 26.20
2018 13.00 18.80 26.60
2019 13.40 19.40 27.00
2020 13.80 20.00 27.40
2021 14.20 20.60 27.80
2022 14.60 21.30 28.30
2023 15.00 21.90 28.70
2024 15.50 22.60 29.20
2025 15.90 23.30 29.60
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The Indonesia Investment Coordinating Board (BKPM) Source: MEMR Regulation No 21 of 2016.
No Region Feed-in Tariff (cent USD/kWh)
Biomass (PLTBm) Biogas (PLTBg)
Capacity ≤ 20 MW>20 up to
50 MW> 50 MW
≤ 20 MW >20 up to 50 MW
> 50 MW
Grid Connection LV MV/HV HV HV LV MV/HV HV HV
1 Java Island 16.00 13.50 11.48 10.80 13.14 10.64 9.05 8.51
2 Sumatra Island 18.40 15.53 13.20 12.42 15.11 12.24 10.41 9.79
3 Sulawesi Island 20.00 16.88 14.35 13.50 16.43 13.30 11.31 10.64
4 Kalimantan Island 20.80 17.55 14.92 14.04 17.08 13.83 11.77 11.06
5 Bali, Bangka Belitung and Lombok Islands
24.00 20.25 17.22 16.20 19.71 15.96 13.58 12.77
6 Riau, Nusa Tenggara Other Islands
25.60 21.60 18.37 17.28 21.02 17.02 14.48 13.62
7 Maluku and Papua Islands
27.20 22.95 19.52 18.36 22.34 18.09 15.39 14.47
** As Excess Power 16.00 13.50 11.48 10.80 13.14 10.64 9.05 8.51
Note: FIT is levelized base price on generation bus bar applied after Commercial Operation Date (COD); including interconnection cost; with contract duration of 20 years (except as excess power max 1 year extendable); and based on:
capacity: up to 20 MW, above 20 MV up to 50 MW or above 50 MW grid connectivity: to LV (Low Voltage, 220 V), MV (Medium Voltage, 20 kV) or HV (High Voltage, ≥ 70 kV)
The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase electricity generated by Independent Power Producer (IPP) decided as “PLTBm/PLTBg Developer” by DG NREC-MEMR.
IPP should refers to National Electricity Master Plan (RUPTL) 2016-2025.
Feed –in Tariff (FIT)
Bio Energy Power Plant (PLTBm/PLTBg)
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The Indonesia Investment Coordinating Board (BKPM)
Feed –in Tariff
Municipal Waste Power Plant (PLTSa)
Feed-in Tariff (cent USD/kWh)
Methane Gas Utilization using Sanitary Landfill,
Anaerob Digestion or Similar Technologies
Thermal Utilization using Termochemical Technologies
Up to 20 MW Up to 20 MWAbove 20 MW up to 50
MWAbove 50 MW
HV MV LV HV MV LV HV MV LV HV MV LV16.55 20.16 18.77 22.43 15.95 - - 13.14 - -
Source: MEMR Regulation No. 44 of 2015.
Note: Feed-in Tariff (FIT) is levelized base price on generation bus bar applied after Commercial Operation Date (COD);including interconnection cost; with contract duration of 20 years; based on grid connectivity: HV (High Voltage,above 20 kV), MV (Medium Voltage, 20 kV) or LV (Low Voltage, 220 V).The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase electricity generated by Independent Power Producer (IPP) decided as “PLTSa Developer” by DG NREC-MEMR from Open Tender mechanism held by Regional Government.
IPP should refers to National Electricity Master Plan (RUPTL) 2016-2025.
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The Indonesia Investment Coordinating Board (BKPM)
Feed –in Tariff (FIT)
Solar PV Power Plant (PLTS)
Source: MEMR Regulation No. 19 of 2016.
No RegionQuota Capacity
(MW) Feed-in Tariff (cent
USD/kWh)
1 DKI Jakarta
150,0 14,5
2 West Java 3 Banten
4 Central Java and DIY
5 East Java
6 Bali 5,0 16,0
7 Lampung 5,0 15,0
8 South Sumatera, Jambi, and Bengkulu
10,0 15,0
9 Aceh 5,0 17,0
10 North Sumatera 25,0 16,0
11 West Sumatera 5,0 15,5
12 Riau and Riau Islands 4,0 17,0
13 Bangka Belitung 5,0 17,0
14 West Kalimantan 5,0 17,0
15 South and Central Kalimantan
4,0 16,0
16 East and North Kalimantan 3,0 16,5
17 North and Central Sulawesi, Gorontalo
5,0 17,0
18 South, Southeast and West Sulawesi
5,0 16,0
19 West Nusa Tenggara 5,0 18,0
20 East Nusa Tenggara 3,5 23,0
21 Maluku and North Maluku 3,0 23,0
22 Papua and West Papua 2,5 25,0
Note: Feed-in Tariff (FIT) is levelized base price on generation bus bar applied after Commercial Operation Date (COD); including interconnection cost; with contract duration of 20 years.
Quota capacity in total of 250 MW as stated in the table on the left, is the first phase from the total quota of above 5,000 MW to be offered by the Goverment. FIT could be differed on each phases.
The procurement will be held online by DG NREC-MEMR (registration, initial verification, quota request, final verification on first come first served verification basis).
The State Electricity Company (PT PLN)—under Power Purchase Agreement (PPA)—is obliged to purchase electricity generated by Independent Power Producer (IPP) decided as “PLTSa Developer” by DG NREC-MEMR.
IPP should refers to National Electricity Master Plan (RUPTL) 2016-2025.
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The Indonesia Investment Coordinating Board (BKPM)
Feed-in Tariff (FIT) for:
• Home System (rooftops) Solar PV (likely will be under the net metering system), • Windfarm (probably a combination of FIT for small scale windfarm and Ceiling Price
for high scale one)
are currently being prepared by the Ministry of Energy and Mineral Resources.
By then, tariff(s) should be negotiated between IPP and PLN.
Latest Updates on Feed –in Tariff (FIT)
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The Indonesia Investment Coordinating Board (BKPM)
Negotiation with PLN ... PLN’s Basic Cost of Electricity Production as Proxy??
No PLN’s Local Unit (Area/Distribution) Basic Cost of Electricity Production (as of June 2015)
IDR/kWh USD cent/kWh
1 Maluku and North Maluku 3,126 22.33
2 East Nusa Tenggara (NTT) 2,988 21.34
3 West Kalimantan (Kalbar) 2,701 19.29
4 Aceh 2,683 19.16
5 Papua and West Papua 2,680 19.14
6 Bangka Belitung (Babel) 2,671 19.08
7 West Nusa Tenggara (NTB) 2,481 17.72
8 North Sumatra 2,341 16.72
9 North & Central Sulawesi and Gorontalo (Sultenggo) 2,185 15.61
10 East Kalimantan (Kaltim) 1,882 13.44
11 Riau and Riau Islands 1,711 12.22
12 South and Central Kalimantan (Kalselteng) 1,613 11.52
13 South, South East and West Sulawesi (Sulselrabar) 1,437 10.26
14 West Sumatra 1,353 9.66
15 Lampung Distribution 1,351 9.65
16 South Sumatra, Jambi & Bengkulu (S2JB) 1,340 9.57
17 East Java Distribution (Disjatim) 1,137 8.12
18 Bali Distribution (Disbali) 1,218 8.70
19 Central Java and Yogyakarta Distribution (Disjateng) 1,153 8.24
20 Jakarta and Tangerang Distribution (Disjaya) 1,113 7.95
21 West Java and Banten Distribution (Disjabar) 1,099 7.85
INDONESIA (AVERAGE) 1,272 9.09
The Investment Coordinating Board of the Republic of Indonesia
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ELECTRICITY TARIFF (Oct 2016)Fact: Outside Java, PLN sells electricity to consumers less than their Basic Cost of Electricity Production
Equals to ~ USD 11 cents/kWh