Survey For Enhancement of Private Sector Investment On Small Hydro IPP Projects in Indonesia

Survey
for
Enhancement of
Private Sector Investment on
Small Hydro IPP Projects
in Indonesia
Final Report
June 2015
KRI INTERNATIONAL CORPORATION
OS
JR
15-041
Survey
for
Enhancement of
Private Sector Investment on
Small Hydro IPP Projects
in Indonesia
Final Report
June 2015
KRI INTERNATIONAL CORPORATION
JICA Survey for Enhancement of Private Sector Investment on Small Hydro IPP Projects in Indonesia
Final Report
Survey
for
Enhancement of Private Sector Investment on
Small Hydro IPP Projects in Indonesia
Final Report
Table of Contents
Chapter 1 Background and Objectives of the Survey ........................................................................... 1
1.1
1.2
Background of the Survey .........................................................................................................1

Outline and Scope of the Survey ...............................................................................................1
Chapter 2 Status of Small Hydropower Sector and Related Legal Framework .................................... 3
2.1
Power Supply and Demand, Development of Power Generation Facilities and

Hydropower Potential...............................................................................................................3
2.1.1
Electric Power Supply and Demand ................................................................................. 3
2.1.2
Development of Power Generation Facilities ................................................................... 6
2.1.3
Hydropower Potential ....................................................................................................... 8
2.2
Overview of Policies and Institutions of the Indonesian Government ....................................10
2.2.1
Policy and Institutions on Electric Power Development ................................................ 10
2.2.2
Electric Power Development System ............................................................................. 11
2.2.3
Power Development Plan ............................................................................................... 11
2.2.4
Electricity Tariff ............................................................................................................. 12
2.2.5
Budget and Financial Sources ........................................................................................ 15
2.2.6
Enhancement of Private Investment and Development .................................................. 16
2.3
Current Status of Development Policy for Promotion of Private Sector
Participation on Small Hydropower Business ........................................................................18
2.3.1
Regulation of the Ministry of Energy and Mineral Resources ....................................... 18
2.3.2
PPA and Power Tariff .................................................................................................... 19
2.3.3
Revision of PPA ............................................................................................................. 21
2.3.4
Permission/License Required for Small Hydropower Business ..................................... 22
Chapter 3 Parties Concerned with Small Hydro IPP Projects............................................................. 23

3.1
3.2
3.3
3.4
Investor....................................................................................................................................23
Financial Institutions ...............................................................................................................23
Construction Equipment Manufacturer ...................................................................................23
Equipment Suppliers/Manufacturer ........................................................................................24
Chapter 4 Selection and Identification of Small Hydropower Projects to be Promoted ..................... 25

4.1
General ....................................................................................................................................25
Chapter 5 Financing Structure for JICA-PSIF .................................................................................... 27
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5.1
5.2
5.3
5.4
Credit Overview for Small Hydropower Independent Power Producers (IPPs) in

Indonesia ................................................................................................................................27
Issues in the FS and the Transaction Costs for Small-scale Projects ......................................29
Financing Structure for Several Small Hydropower IPP Projects ..........................................30
Financing Structure for Several Projects Initiated by a Single Developer ..............................32
Chapter 6 Preliminary Action Plan ..................................................................................................... 34

Attachment:
Guideline for Feasibility Study for Small Hydropower Project (Draft)
ii
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List of Table
Table 2.1.1 Installed Capacity (2013)................................................................................................... 4
Table 2.1.2 Power Generation (2013)................................................................................................... 4
Table 2.1.3 Capacity Factor and Load Factor (2013) ........................................................................... 5
Table 2.1.4 Increase in Installed Capacity (PLN only, MW)................................................................ 6
Table 2.1.5 Power Development Plan (RUPTL 2013-2022) ................................................................ 6
Table 2.1.6 Outline of Crash Programs ................................................................................................ 7
Table 2.1.7 (1) 35 GW Power Development Plan (2015-2019) ........................................................... 7
Table 2.1.7 (2) 35 GW Power Development Plan (2015-2019) in Each Region .................................. 8
Table 2.1.7 (3) 35 GW Power Development Plan (2015-2019) in Each Source .................................. 8
Table 2.1.8 Potential of Renewable Energy ......................................................................................... 8
Table 2.1.9 Development Plan of Renewable Energy .......................................................................... 9
Table 2.1.10 Status of Small Hydropower Development (as of the end of February 2015)................. 9
Table 2.1.11 Historical Revision of Electricity Tariff......................................................................... 13
Table 2.1.12 Subsidy from the Government to PLN .......................................................................... 15
Table 2.1.13 Power Generation Cost by Sources ............................................................................... 15
Table 2.3.1 Power Purchase Price for Small Hydropower Project ..................................................... 19
Table 2.3.2 Power Purchase Price for Small Hydropower Project Utilizing Existing Structures ...... 20
Table 2.3.3 Permission/License for Small Hydropower Business...................................................... 22
List of Figure
Figure 2.2.1
Figure 2.3.1
Figure 4.2.1
Figure 5.3.1
Figure 5.3.2
Figure 5.4.1
Figure 6.1.1
BKPM One Stop Service Related to Power Generation Business ................................. 17

Procedure for Small Hydropower Development ............................................................ 18
Flow of Project Screening .............................................................................................. 26
Equity Investment Structure via Fund ........................................................................... 30
Financing Structure of Two-step Loan for Several Projects .......................................... 31
Financing Structure for Several Projects Initiated by a Single Developer ..................... 33
Example of Schedule of Small Hydropower Development ........................................... 34
iii
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Abbreviation
AMDAL
(Analisis Mengenai Dampak Lingkungan)
FIT
HGB
(Hal Guna Bangunan)
HO
(Hinder Ordonantie)
IMB
(Izin Mendirikan Bangunan)
IPP
IUPTL
(Izin Usaha Penyediaan Tenaga Listrik)
IUPTLS
(Izin Usaha Penyediaan Tenaga Listrik Sementara)
SIPPA
(Surat Izin Pengambilan dan Pemanfaatan Air)
SIPTPP
(Surat Izin Pemanfaatan Tanah Pemerintah Provinsi)
UKL/UPL
(Upaya Pengelolaan Lingkungan Hidup/
Upaya Pemantauan Lingkungan Hidup)
RUPTL
iv
Environmental Impact Analysis

Feed-In Tariff
Land register
Obstacle permission
Construction permission
Independent Power Producer
Formal electricity business license
Provisional electricity business license
Water use permission
River use permission
Environmental monitoring study/
Environmental management study
Power Supply Business Plan
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Chapter 1
1.1
Background and Objectives of the Survey
Background of the Survey
In order to respond to the rapidly growing demand for electric power that has been increasing at an
annual rate of approximately 8%, the Government of Indonesia (GOI) has been promoting a new
power development by launching the First and Second Crash Program consecutively. According to
RUPTL 2013-2022, PT PLN plans to develop an additional 59,518MW of electric power facilities by
2022. In this plan, 836 MW will be filled through the development of small hydropower generation
facilities. Specifically, GOI attaches importance to the system of utilizing small hydro IPP projects
for 10 MW or less capacity. GOI is thus politically expediting small hydropower development, which
is small in size but can be developed in a short period of time with relatively small amount of
investment.
Under these circumstances, the number of private companies related to small hydro IPPs has been
increasing significantly, although actual physical construction has not been progressing smoothly.
The reasons for this are: (a) lack of technical experience in planning, designing, and engineering of
power generation facilities especially in local private companies, and (b) absence of Indonesian
rupiah-denominated long-term loans under project-based finance scheme. However, since no bidding
process is required under Indonesian laws, and also because business profitability is somewhat secured
by the feed-in tariff (FIT) system, small hydro generation is the area of interest among Japanese
companies with high technical capacities in terms of equity investment and equipment supply. At the
same time, the Japan International Cooperation Agency (JICA) provides a comprehensive framework
to support the enhancement of renewable energy in developing countries, from grant assistance for
feasibility study conducted by a private sector through the private sector investment finance
(hereinafter referred to as PSIF).
As described above, promoting small hydropower generation conforms to GOIs challenge and its
development policy. By utilizing the Japanese companies technology as well as JICAs PSIF, it is
possible to solve technical and financial problems, which have been the bottlenecks to promote small
hydro IPPs by the private sector. Therefore, this survey is designed to collect and verify related
information, and to coordinate needs and solutions of relevant parties.
1.2
Outline and Scope of the Survey
1) Objectives
In order to promote private small hydropower projects, the survey aims to:
Examine the existing situation of small hydropower sector, the features and progress of the
projects, and the intention of Japanese companies and financial institutions on the sector; and
List up the projects which will be suitable for JICA-PSIF as well as participation of Japanese
companies.
2) Target Projects
Small hydropower projects listed by PLN.
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3) Survey Area
Sumatra and Sulawesi islands in Indonesia
4) Targeted Project
Small hydropower project under FIT system (less than 10 MW)
5) Counterpart
Ministry of Energy and Mineral Resources (MEMR), PT PLN (Persero)
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Chapter 2 Status of Small Hydropower Sector and Related Legal

Framework
2.1
Power Supply and Demand, Development of Power Generation Facilities

and Hydropower Potential
2.1.1 Electric Power Supply and Demand

Indonesia's recent economic growth has exceeded an annual average of 6%. Due to the high economic
growth, demand for power shows an increase of 8%. Due to land acquisition issues and other matters,
the power development plan is delayed and the power demand and supply condition has become very
tight. In North Sumatra, some rolling blackouts are carried out and will potentially hinder economic
development. Rapid realization of electric power development is therefore desirable.
The installed capacity, power generation, and power source in 2013 are presented below.
1) Installed Capacity (MW)
Overall, power generation is highly reliant on coal-fired steam power. IPP capacity is only one-fourth
against the entire Indonesia. Percentage of renewable energy sources such as small hydro, solar, and
wind is still small. As a notable point, capacity from diesel (mainly rental) covered a large portion
outside of Java-Bali; it is thus obvious that rural power is covered by diesel. Ongoing small
hydropower IPP development is expected to replace these diesel power sources. Capacity per capita
was 0.2 kW/person in year 2013. Compared with 2.2 kW/person in Japan, this capacity is still at a low
level.
2) Power Generation (GWh)
Amounts of generated power are the same as the installed capacity. Power generation is mainly
dependent on thermal coal. The high ratio of diesel outside of Java-Bali is indicated and the combined
cycle ratio is relatively high in Java-Bali.
3) Capacity Factor and Load Factor
Peak load exceeds the installed capacity outside of Java-Bali. Figures shown above do not include one
of IPP, lack of peak load covered from IPP, and rolling blackouts in the region. Throughout Indonesia,
the power supply and demand conditions are toughest, and the delay in power development will likely
cause a stumbling block for continuous economic growth.
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Table 2.1.1
Installed Capacity (2013)

(MW)
Region
Power Source
Hydro
Steam (Oil and Coal)
Gas Turbine
Combined Cycle
Geothermal
Diesel 1)
Solar
Wind
Subtotal
Sumatra
Sulawesi
863.82
223.56
1,182.00
635.60
857.88
110.00
1,047.57
0.43
0.00
4,696.70
112.00
134.72
0.00
80.00
454.55
3.08
0.08
1,007.88
Maluku, Papua &

Kalimantan
NusaTenggara
32.11
7.97
260.00
89.00
60.00
0.00
613.90
0.61
0.00
1,046.62
Java - Bali
30.00
0.00
0.00
3.00
631.13
3.82
0.35
673.27
IPP
Total
7,437.18
1)
Includes diesel gas and rental.
(Source: Study Team, created from PLN Statistics 2013 and 2013 PLN Annual Report)
Table 2.1.2
IPP
Entire Indonesia
2,392.03
3,519.49
13,970.00
2,034.56
7,896.23
375.00
100.63
0.00
0.00
15,554.00
2,893.88
8,814.11
568.00
2,847.78
7.98
0.43
34,205.63
26,768.45
11,898.37
11,897.37
11,897.37
46,104.00
10.3%
45.5%
8.5%
25.8%
1.7%
8.3%
0.0%
0.0%
100.0%
(74.2%)
(25.8%)
(100.0%)
Power Generation (2013)
(GWh)
Region
Item
Hydro
Steam (Oil and Coal)
Gas Turbine
Combined Cycle
Geothermal
Diesel 1)
Diesel Gas
Solar
Sumatra
3,699.16
5,233.94
1,967.09
3,482.29
825.18
707.06
371.19
0.36
Sulawesi
1,453.10
470.43
54.35
0.00
521.09
472.67
3.76
2.05
Kalimantan
163.53
1,760.37
257.10
393.38
0.00
956.14
6.80
0.44
Maluku, Papua &

NusaTenggara
30.60
147.07
0.00
0.00
27.93
1,006.98
0.00
2.64
Java - Bali
7,663.15
73,314.28
3,637.97
32,547.75
2,970.89
69.27
-
Entire Indonesia
13,009.55
80,926.10
5,916.51
36,423.42
4,345.09
3,212.13
381.75
5.48
6.0%
37.4%
2.7%
16.8%
2.0%
1.5%
0.2%
0.0%
Final Report
Region
Sumatra
Sulawesi
Kalimantan
Item
Wind
0.00
0.00
0.00
Rental
9,536.02
2,014.83
3,959.75
IPP
7,337.42
3,657.65
869.52
Total
33,159.71
8,649.93
8,367.03
(Source: Study Team, created from PLN Statistics 2013 and 2013 PLN Annual Report)
Maluku, Papua &

NusaTenggara
0.00
2,690.28
149.00
4,054.50
Java - Bali
Entire Indonesia
1,544.87
40,209.21
161,957.39
9.1%
24.2%
100.0%
Table 2.1.3
Region
Capacity Factor and Load Factor (2013)

Maluku, Papua &
Sulawesi
Kalimantan
NusaTenggara
1,007.99
1,055.62
676.27
1,346.88
802.00
770.48
133.6%
76.0%
113.9%
-33.6%
24.0%
-13.9%
19,755.71
52,222.79
216,188.55
Sumatra
Item
Installed Capacity (MW)
4,697.30
Peak Load (MW)
5,329.11
Load Rate (%)
113.5%
Reserve Ratio (%)
-13.5%
Total Yearly Power
41,148.3
8,830.0
9,247.2
Generation (GWh) 2)
Yearly Power Generation
25,822.29
4,992.28
7,497.51
(GWh) 3)
4)
Capacity Factor (%)
62.8%
56.5%
81.1%
Yearly Peak Power
46,683.00
11,798.67
7,025.52
Generation (GWh) 5)
Total Yearly Power
33,159.71
86,49.93
8,367.03
Generation (GWh) 6)
7)
Total Load Factor (%)
71.0%
73.3%
119.1%
(Source: Study Team; created from PLN Statistics 2013 and 2013 PLN Annual Report)
Note: 1) IPP is not included.
2) Capacity x 8,760 hours
3) Power generation at power station side.
4) Capacity Factor = Yearly Power Generation / Capcity x 8,760 hrs
5) Peal Load x 8,760 hrs
6) Total power generation including imported one.
7) Total Load Factor = Total Yearly Peak Power Generation / Peak Load x 8,760 hrs
Java - Bali
Entire Indonesia
26,768.45
22,575.21
84.3%
15.7%
34,205.63
30,833.60
90.1%
9.9%
5,924.1
234,491.6
299,641.3
3,905.5
12,1748.18
163,965.75
65.9%
51.9%
54.7%
6,749.40
197,758.84
270,015.44
4,054.5
161,957.39
216,188.54
60.1%
81.9%
80.1%
Final Report
2.1.2 Development of Power Generation Facilities

Development of electric power in Indonesia is carried out under the National Electric Power General
Plan (RUKN) and the Electric Power Implementation Plan (RUPTL) to develop power generation
facilities associated with economic development to cope with the power supply. The situation of the
development (increase of installed capacity) for the year of 2005-2013 is as follows:
Table 2.1.4 Increase in Installed Capacity (PLN only, MW)
(Source: PLN Statistics 2013)
In the nine years from 2005 to 2013, the installed capacity of 11,690 MW has increased. On the other
hand, RUPTL 2013, which involves the construction of power plants of 59,518 MW including IPP is
planned in the ten years up to 2022. It means 6,000 MW capacity power plants every year shall be
constructed. In the plan, 836 MW of small hydropower is to be developed.
Existing
Addition
Total
Capacity
Planning
PLN
IPP
Unallocated
Total
Power Source
Steam
Geo-thermal
Combined
Gas
Diesel
Mini-hydro
Hydro
Solar
Others
Table 2.1.5 Power Development Plan (RUPTL 2013-2022)

2013
2014
2015
2016
2017
2018
2019
2020
2021
46,104
2,832 3,786
2,838
5,948
5,459 10,627
9,154
7,473
5,348
46,104 49,890
2022
Total
6,053
59,518
52,728
58,676
64,135
74,762
83,916
91,389
96,737
102,790
2,919
2,003
1,026
5,948
1,869
1,506
2,084
5,459
1,234
6,838
2,555
10,627
55
6,410
2,689
9,154
90
3,948
3,435
7,473
2,003
1,391
1,954
5,348
1,244
1,535
3,274
6,053
16,853
25,552
17,113
59,518
2,891
85
1,200
1,376
249
10
137
2,014
580
950
273
241
341
1,040
20
7,339
495
2,350
128
31
284
-
6,933
1,665
165
5
386
-
5,640
650
60
3
671
450
-
2,932
670
123
1,173
450
-
3,280
1,825
120
824
4
37,969
6,060
5,000
3,676
836
3,753
1,940
282
2,518
314
2,908
878
2,832
3,786
2,013
729
96
2,838
2,464
90
250
21
6
2,931
60
80
539
107
20
50
1,545
30
330
642
180
45
65
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The Indonesian government will supply the rapid increase in power demand and to reduce its
dependence on oil. As part of the urgent power development plan, two crash programs were
formulated and implemented. The outline of the crash programs is as follows:
Item
Development Plan Period
(Initial)
Purpose
Table 2.1.6 Outline of Crash Programs

1st Crash Program
2nd Crash Program
2006-2009
- Emergency power development
in Java-Bali system mainly
- Reduction of dependence of oil
Developed Capacity
10,000 MW
(Java-Bali: 6,900 MW
Outside the territory : 3,100 MW)
Power Supply
Configuration
Coal: 100%
Progress in 2014
Completed: 7,368 MW
In progress: 2,439 MW
2010-2014
- Emergency power supply
development
- Power diversification
- Utilization of renewable energy
10,000 MW
(Java-Bali: 5,070 MW
Outside the territory : 4,452 MW)
Review in 2012 and 2013, with
18,000 MW as target.
Renewable energy 54%
(Geothermal 41%, Hydro 13%)
Fossil fuel 46% (Coal 36%, Gas
1%, Combined Cycle 9%)
Completed: 55 MW
In progress: 17,403 MW
Both crash programs are experiencing significant delays, main reasons for which are delays in land
acquisition and various licensing/permission procedures. Projects in the 1st crash program were
mainly contracted with Chinese companies. However, many problems such as lack of cash for
construction have been reported. Moreover, there were many out of orders and insufficient rated
output of the power generation equipment even it was completed.
Furthermore, the 2014 new president, Mr. Jokowi, announced his ambitious plan to develop a 35.5
GW power plant over the next five years.
Table 2.1.7 (1)
No
1
2
3
4
Total
35 GW Power Development Plan (2015-2019)

Owner
Total Capacity
Status of Process
PLN
IPP
(GW)
Construction
4.2
3.2
7.4
Committed
2.9
4.3
7.2
Procurement
2.2
11.3
13.6
Plan
5.1
9.6
14.7
(incl. Construction)
14.4
28.5
42.9
(excl. Construction)
10.2
25.2
35.5
Each region and power source of the 35 GW Power Development Plan are shown in Table 2.1.7 (2)
and Table 2.1.7 (3), respectively.
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Table 2.1.7 (2)
Sumatra
35 GW Power Development Plan (2015-2019) in Each Region

(Unit: GW)
Jawa-Bali
Kalimant
an
Sulawesi
Nusa
Tenggara
Maluku
PLN
1.1
5.0
0.9
2.0
0.3
IPP
7.6
15.9
1.0
0.7
0.0
Total
8.7
20.9
1.9
2.7
0.3
(Source: PLN)
*) 35.5 GW corresponds to Total (excl. Construction) in Table 2.1.7 (1)
Table 2.1.7 (3)
Steam
PLN
Extension
IPP
PPP
Total
Papua
0.7
0.0
0.7
0.2
0.1
0.3
Total
10.2
25.3
35.5*)
35 GW Power Development Plan (2015-2019) in Each Source

(Unit: GW)
Steam
(Mine
Mouth)
5.6
5.2
12.3
23.1
1.6
1.2
2.8
Gas/
Combined
Hydro
Geothermal
Others
Total
7.2
1.4
0.1
0.1
6.2
0.2
1.1
0.7
13.4
1.6
1.2
0.8
14.4
5.2
22.1
1.2
42.9*)
(Source: PLN)
*) 42.9 GW corresponds to Total (incl. Construction) in Table 2.1.7 (1)
2.1.3 Hydropower Potential

In the Hydro Power Potential Study carried out in 1999, hydro power potential amounting to 22.0 GW
passed the third screening including planning and implementation. Furthermore, the Indonesia
Hydropower Master Plan in 2011 estimated potential capacity of 14.6 GW will be implemented until
2027.
According to RUPTL (2013-2022), the potential of renewable energy and developed power capacity is
as follows:
Table 2.1.8 Potential of Renewable Energy
New and Renewable
Developed
Potential
Energy
Capacity
No.
(1)
(2)
(3)
1
Mini/Micro-hydro
7,500 MW
86.1 MW
2
Biomass
49,810 MW
445.0 MW
3
Solar Power
4.80 kWh/m2/day
12.1 MW
4
Wind Power
9,290 MW
1.1 MW
5
Ocean
240 GW
1.1 MW
(Source: RUPTL 2013-2022)
Ratio (%)
(4) = (3)/(2)
1.15
0.89
0.01
0.01
The development plan for renewable energy until 2022 is listed below by year.
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Development Plan of Renewable Energy1
Table 2.1.9
No.
1
2
3
4
5
New/Renewable
Energy
Mini/Microhydro
Solar Power
Wind Power
Biomass
Ocean
Total
Unit
MW
MWp
MW
MW
MW
MW
2013
2014
33
6
48
87
42
104
10
156
2015
2016
96
75
50
15
1
237
149
54
20
20
243
2017
237
36
20
30
1
324
2018
192
60
20
40
3
315
2019
186
75
30
50
3
344
2020
156
75
40
50
5
326
2021
190
75
50
50
5
370
2022
200
75
50
50
10
385
Total
1,481
634
280
363
28
2,786
(Source: RUPTL 2013-2022)
Small hydro-electric power takes the major share in renewable energy and its development is
expected.
According to the PLN, a total of 318 projects with less than 10 MW capacity as well as under FIT
scheme has been proposed to PLN in the entire Indonesia. Out of 318 projects, 49 projects are
currently in operation and 49 projects are under construction. About 220 projects are at present before
financial closure status.
Table 2.1.10 Status of Small Hydropower Development (as of the end of February 2015)
Status
Indonesia Timur
Operation
Construction
Financing Proces
PPA Process
Proposal
Jawa Bali
Operation
Construction
Financing Proces
PPA Process
Proposal
Sumatera
Operation
Construction
Financing Proces
PPA Process
Proposal
Grand Total
Number Capacity (kW)

84
305,720
21
59,840
11
39,700
7
32,700
21
88,330
24
85,150
114
413,885
17
17,870
15
60,070
10
62,620
33
111,206
39
162,119
120
713,730
11
37,625
23
156,458
26
162,948
27
185,700
33
170,999
318
1,433,335
(Source: PLN)
In Table 2.1.5, the development capacity of mini hydropower until 2022 is 834 MW. On the other hand, the total
development capacity is 1,481 MW in Table 2.1.9, thus there is a discrepancy between the tables. Taking the present
application condition of FIT projects into consideration, Table 2.1.9 is deemed to be correct.
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2.2
Overview of Policies and Institutions of the Indonesian Government
2.2.1 Policy and Institutions on Electric Power Development

Indonesia's energy policy is established by the National Energy Policy (KEN), with the National
Energy Total Plan (RUEN) as a base. Under these policies, the National Electric Power General Plan
(RUKN) and Electric Power Implementation Plan (RUPTL) are prepared as implementation plans.
The National Energy Policy (KEN) was revised in January 2014 and the target values for each electric
power energy resource are set as follows:
-
Oil:
Natural gas:
Coal:
Renewable energy:
less than 25% by 2015 and less than 20% by 2050.

more than 22% by 2025 and more than 24% by 2050.
less than 30% by 2025 and less than 25% by 2050.
more than 23% by 2025 and more than 31% by 2050.
In addition, the electrification rate is targeted at 85% by 2015 and nearly 100% by 2020. Domestic
primary energy shall be used for domestic purposes as much as possible. As a related policy, the
National Energy Management Blueprint (BP-PEN) 2006-2025 was established and national targets
related to energy were set.
Based on the policy in KEN, in the electric power sector, the MEMR established the National Electric
Power General Plan (RUKN) and developed PLN, who is the only power supply company in
Indonesia. It also prepared the Electric Power Implementation Plan (RUPTL) and implemented the
power development plan. The RUPTL is formulated for a period of ten years, however, it is revised
every year. As a relevant economic policy, national development plans such as the National Long-term
Development Plan (RPJPN) are formulated every 20 years. Governed by the RPJPN, the National
Medium-term Development Plan (RPJMN) is formulated every five years. The latest RPJMN was
prepared in 2014.
As for the laws on energy and power, these are the: 1) Energy Law (2007), 2) Electric Power Law
(2009), 3) Decree on Save Energy (2009), and 4) Geothermal Power Law (2003). The Energy Law of
2007 covers management and usage of all energy resources such as 1) management of energy
resources by the government, 2) stable energy supply, 3) resources development promotion, 4)
formulation of national energy policy and energy plan, and 5) use of renewable energy. The new
power law is a revision of the old energy law in 1985. In the power law, the government is responsible
for power supply. However, aimed at the improvement of power supply, it is now possible for
state-owned companies other than PLN, public enterprises, private enterprises, cooperatives, and civic
groups to participate in the power generation business. RUKN and the revision of power tariff require
parliament approval. The Decree on Save Energy stipulates to oblige energy saving in large consumers
of energy. The Geothermal Power Law acknowledged the participation of private investors in
integrated development of geothermal projects including steam development, supply and power
generation for geothermal development promotion. The processes of getting permits and licenses in
each phase of geothermal energy development have become clear.
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2.2.2 Electric Power Development System

As the administrative organization for the electricity sector, the formulation of the overall policy for
the development and use of energy is done by the National Energy Board (DEN). The Ministry of
National Planning and Development (BAPPENAS) manages the national project development policy
and coordination. The Department of Energy and Mineral Resources (MEMR) is the administrative
organization for the entire energy sector including the power sector. The PLN and state-owned
enterprises are under the control of the Ministry of State-Owned Enterprise (MSOE), while the
Ministry of Finance (MOF) manages the budget.
The MEMR is the supervisory institution for the energy sector and performing management and
regulation of state-owned energy companies in addition to policy planning. The Directorate of
Electricity in MEMR acts as the electric power administrator of the electricity sector and plays the role
of regulation and supervision, including coordination of the formulation of policy, procedures, and
standards. It is responsible for the formulation of the National Electric Power General Plan (RUKN).
In 2010, MEMR has organized the Directorate of New and Renewable Energy and Save Energy
(DGNREEC) for the development of renewable energy. The geothermal section of the Directorate of
Minerals, Coal and Geothermal, and renewable section of the Directorate of Electricity were
integrated into the DGNREEC. In the power generation business in Indonesia, PT. PLN (the national
electric power company) and its subsidiary companies and IPPs are carrying out power generation. For
transmission and distribution of electricity, PLN has monopoly.
The Java-Bali system has larger scale power generation and supply. Power generation is being
undertaken by PLN, its subsidiary companies such as Indonesia Power (IP), Pumbankit Jawa Bali
(PJB), and IPPs. Transmission and distribution of the Java-Bali system are managed by the power
transmission and distribution center (P3B Jawa Bali) and five distribution offices. In Sumatra, two
units are doing power generation. As for transmission and distribution, the Sumatra power
transmission and distribution center (P3B Sumatra) and seven regional offices are doing these tasks. In
other areas, the regional branch offices are carrying out integrated operation of power generation,
transmission, and distribution.
2.2.3 Power Development Plan

Based on the national energy policy, the MEMR established RUKN and consequently, the RUPTL is
prepared and power development is carried out by PLN.
The RUKN describes major development policies as shown below.
Power supply planning policy
Support MP3EI (2011-2025 in the Indonesian accelerated and enlarged economic

development master plan);
Avoidance of lack of power supply;
Sufficient energy reserves;
Development of peak load power plants by gas, pumped storage power plant; and
Competitive electricity tariff structure.
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Diversification of power source
Enhancement in the use of new and renewable energy;
Establishment of sustainable power supply system for various energy power sources; and
Support of gas supply for gas power generation and storage of coal for coal-fired power
generation as a reduction measure for oil-dependency of fuel.
The RUPTL is a ten-year plan, but due to actual delays of the plan and changes in conditions, it is
updated every year. It is a power development plan prepared based on the present situation. The power
development plan is established to satisfy the electricity demand which is forecasted to consider future
economic and population growths. Construction of the transmission and distribution networks are
planned in order to harmonize with the power development plan. Further, the required construction
costs for these electric power development and fuel costs required for operation are estimated.
2.2.4 Electricity Tariff

Indonesia's electricity tariff has been kept low by government subsidies. However, in order to mitigate
the financial burden of the government, an increase in electricity tariff and the reduction of subsidies
was approved by the Parliament in 2013. The increase in electricity tariff is done gradually. The power
cost deficit, which cannot cover PLNs income from electricity sales, is made up by government
subsidies. Government subsidies are calculated by the Ministry of Finance. By these subsidies,
electricity tariff has been kept to a low and stable level without the effect of fuel costs. Government
subsidies were Rp3-4 trillion in the early 2000s. After then, due to the rise in oil prices, the power
generation fuel price has also increased. Finally, government subsidies were increased at Rp101
trillion in 2013. In 2013, although the average generation cost was at Rp1,207/kWh, the average sold
electric price is Rp818.4/kWh.
Electrical tariff was increased by about 15% in October 2013. In addition, electricity tariffs for
industrial use (large-demand customer) were changed from May 01, 2013. Tariff for the customer in
contract capacity of more than 200 kVA is increased by 38.9% but this was implemented at 8.6%
every two months. For the size of the contract of more than 30,000 kVA, tariff increase is 64.7%, but
was implemented at 13.3% every two months. In November 2014, another price increase was
conducted.
The revised tariffs are as follows:
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Table 2.1.11 Historical Revision of Electricity Tariff

Customer/
Category
Contract Voltage
Usage Tariff (Rp./kWh)
Basic Tariff
(Rp./kVA/month)
Condition
before 2013
Oct. 2013
Nov. 2014
14,800
Social
S-1/TR 220 VA
S-2/TR 450 VA
(per month)
10,000
S-2/TR
900 VA
15,000
14,800
14,800
Block I : 0 - 30 kWh
123
123
123
Block II : 30 - 60 kWh
265
265
265
Block III : > 60 kWh
360
360
360
200
200
200
295
295
295
360
360
360
S-2/TR 1,300 VA
605
708
708
S-2/TR 2,200 VA
650
760
760
755
900
900
K x P x 605
K x P x 735
K x P x 735
P x 605
P x 735
P x 735
925
925
S-2/TR 3,500 VA-200 kVA

S-3/TM more than 200 kVA
Peak
Off peak
kVArh
Residential
R-1/TR
less than 450 VA

11,000
R-1/TR
900 VA
20,000
169
169
169
360
360
360
495
495
495
275
275
275
445
445
445
495
495
495
R-1/TR 1,300 VA
790
979
1,352
R-1/TR 2,200 VA
795
1,004
1,352
890
1,145
1,352
1,352
1,352
R-2/TR 3,500 VA-5,500 VA

R-3/TR more than 6,600 VA
Block I
H1 x 890
Block II
H2 x 1,380
Business
B-1/TR
B-1/TR
450 VA
900 VA
23,500
26,500
254
254
254
Block II : > 30 kWh
420
420
420
420
420
420
Block II : > 108 kWh
465
465
465
790
966
966
905
1,100
1,100
1,352
1,352
K x 800
K x P x 1,020
K x P x 1,020
800
P x 1,020
P x 1,020
1,117
1,117
B-1/TR 1,300 VA
B-1/TR 2,200 VA-5,500 VA
B-2/TR 6,600 VA-200 kVA
Block I
H1 x 900
Block II
B-3/TM more than 200 kVA
H2 x 1,380
Peak
Off peak
kVArh
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Customer/
Category
Contract Voltage
Usage Tariff (Rp./kWh)
Basic Tariff
(Rp./kVA/month)
Condition
before 2013
Oct. 2013
Nov. 2014
160
160
160
Block II : > 30 kWh
395
395
395
315
315
315
Industry
I-1/TR
450 VA
26,000
I-1/TR
900 VA
405
405
405
I-1/TR
1,300 VA
790
930
930
I-1/TR
2,200 VA
905
960
960
915
1,112
1,112
K x 800
K x P x 972
K x P x 972
800
P x 972
P x 972
I-1/TR
I-2/TR
31,500
3,500 VA-14 kVA

14 kVA-200 kVA
Block II : > 72 kWh
Peak
Off peak
kVArh
I-3/TM
more than 200 kVA
1,057
1,057
K x 680
K x P x 803
K x P x 1,115
680
P x 803
P x 1,115
864
1,200
723
1,191
723
1,191
575
Peak
Off peak
kVArh
I-4/TT
more than 30 MVA
Peak & Off Peak

kVArh
605
-
Government Office & Public Use

P-1/TR 450 VA
20,000
575
575
P-1/TR 900 VA
24,600
600
600
600
880
1,049
1,049
885
1,076
1,076
1,352
1,352
K x P x 750
K x P x 947
K x P x 1,115
P x 750
P x 947
P x 1,115
1,026
1,200
997
1,352
K x 390
K x 483
K x 483
390
483
483
808
808
K x 445
Q x 707
Q x 707
445
Q x 707
Q x 707
1,450
1,650
1,650
P-1/TR 1,300 VA
P-1/TR 2,200 VA-5,500 VA
P-1/TR 6,600 VA-200 kVA
H1 x 885
H2 x 1,380
P-2/TM
more than 200 kVA
Peak
Off peak
kVArh
P-3/TR
Railway
T/TM
more than 200 kV
Peak
23,000
Off peak
(30,950 after 2013)
kVArh
Bulk Use for Large Customer

C/TM
more than 200 kV
30,000
( 0 after 2013)
Peak & Off Peak

kVArh
Emergency/Multipurpose
L/TR, TM, TT
Notes,
1) K : Factor for cost between Peak and Off-peak in each system (region) decided by PLN. (1.4 < K < 2.0)
2) P : Factor for social building, (Pure social building : 1.0, General social building : 1.3 )
3) kVArh : If monthly average power factor is less 85%, electric tariff for kVarh is added.
4) H1 : National average % saving on Lighting Time x Connected Power (kVA)
5) H2 : Energy consumption - H1
6) Q : Factor depend on commercial use and non-commercial use decided by PLN (08 < Q < 2.0)
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2.2.5 Budget and Financial Sources

Budget for electric power business basically depends on the PLN as national executing agency and
IPP as private investor. Income of PLN is composed of electricity sales and government subsidy, and
expenditure is composed of the purchase cost of electricity from IPP, fuel costs, maintenance costs,
labor costs, and depreciation cost. The selling electricity tariffs are decided by the MEMR and should
obtain the approval of the Parliament.
IPP investors invest construction and operating costs and return by selling price to PLN. To cope with
the rapid growth of electricity demand, the construction costs of the power plants, transmission lines,
and distribution grids are covered by official fund as bilateral multilateral aid funds through the
Indonesian government as official development assistance (ODA), funds of the Government of
Indonesia and PLNs own funds. However, because of lack of official funds, the use of private funds
as IPP development such as export credit prepared by the contractor/supplier and finance from banks
has increased.
Government subsidies are compensating the deficit amount not covered by the income from the selling
costs in PLN electricity fee. Subsidy amount is calculated based on a decree of the Ministry of Finance.
If the electricity sales price is lower than the generation cost in each category, PLN can receive the
difference in amount as subsidy. The stable electric tariffs are being realized by this system without
relation to the fluctuation of fuel cost. However, progressively revising the electrical tariff to mitigate
the financial burden is aimed at reducing subsidies. Subsidy amount from 2008 to 2013 is as shown
below.
Year
Subsidy (Rp10^9)
Table 2.1.12 Subsidy from the Government to PLN

2008
2009
2010
2011
2012
78.6
53.7
58.1
93.2
103.3
2013
101.2
(SourcePLN Statistics 2013
As reference, generation costs of each power source are shown in Table 2.1.13.
Table 2.1.13
Power Generation Cost by Sources
(Source: PLN Statistics 2013
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2.2.6 Enhancement of Private Investment and Development

As described above, there is the limitation of official funds to cover construction of power plants in
order to cope with the rapid growth in electricity demand. Investment and development through
private funds in the power sector is being enhanced. In 2013, about 24% of electric power was
supplied from IPPs. In the 2nd crash program currently in progress, out of all 79 projects having
capacity of 17,918 MW, 59 projects with 12,169 MW are IPP projects. Also, of the 35 GW planned
construction scheduled for completion by 2019, about 25.3 GW are from IPP projects.
In order to enhance the development of small hydro power plants with less than 10 MW by private
investors, the Indonesian government provided the FIT system and set the sold electricity price
somewhat higher. Due to the requested large amount of equity and fund for small hydro power plant
IPPs, numerous private investors showed interest and submit IPP proposals to PLN. On the other hand,
for medium and large power projects more than 10 MW, MEMR indicated standard purchase prices
from IPP in the ministry decree for enhancement of private investment. In addition, due to complaints
from investors on the complicated and needed number of steps to get permits and licenses, the
Government of Indonesia opened and launched a one-window process system named as Pelayanan
Terpadu Satu Pintu (PTSP) PUSAT in the Investment Coordinating Board (BKPM) in January 2015.
Its purpose is to mitigate and speed up the process of investment. As shown in Figure 2.2.1,
application and acquisition of various permissions and licenses such as Izin Lokasi (permission of land
acquisition) by local government, IUPTL (electricity business license) by MEMR, PPA (power
purchace agreement) by PLN are to be done at BKPM.
The Government of Indonesia has put in place several incentive policy programs in order to promote
renewable energy development, which include the followings:
Income TaxDevelopers can obtain 5% reduction in the income tax rate of its investment each
year for a period of six years.
Accelerated DepreciationDepreciation of fixed assets can be completed within ten years and
hence, reduce the income tax.
Incentives for Foreign CompaniesIncome tax on dividends of foreign investors can be 10%.
Import DutyThe import duty is exempted for equipment and machinery that cannot be
procured in Indonesia.
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(Source: JICA Survey Team based on the information from BKPM
Figure 2.2.1
BKPM One Stop Service Related to Power Generation Business
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2.3
Current Status of Development Policy for Promotion of Private Sector

Participation on Small Hydropower Business
2.3.1 Regulation of the Ministry of Energy and Mineral Resources

1) Procedures for Small Hydropower Development
Indonesia is currently promoting private sector investment for small hydropower development through
the FIT system. The legal basis for this policy is the Regulation of the Minister of Energy and
Mineral Resources of Indonesia Number 12 of 2014. (May 2, 2014)
Private companies that apply for generation business through the FIT system need to submit the
following documents with their application prior to the business commencement. These include:
a. Overview of the company;
b. License documents based on laws and regulations from the government and local government;
c. Result of pre-FS study confirmed by PLN;
d. Expected total investment amount;
e. Construction schedule until CoD (Commercial Operation date);
f. Documents showing that land is available for the project;
g. Confirmation letter to make a deposit of 5% of the total investment amount within 30 business
days after the decision for the business owner;
h. Document confirming the implementation of PPA issued by PLN; and
i. Confirmation letter that accepts the above conditions.
The project will follow the appraisal and approval processes based on these documents. This process
aimed to sort out the troubled projects and promote moving projects. The procedure for the
development process is presented in the following Figure 2.3.1:
DG of EBTKEappraisal of pre-FS by PLN)
Submission of application
DG of EBTKE
Receipt of decision
Temp. IUPTL application
Progress reportevery 6 months
DG of EBTKEPLN(copy)
MEMRDG of EBTKE(copy)
Deposit submission
DG of EBTKE
MEMR
Temp. IUPTL application
Financial closure
DG of EBTKE(copy)
DG of EBTKE(evidence)
Submission of all documents incl. FS report
PL
IUPTL appl.
Sign PPA
MEMR
DG of EBTKE(copy)
MEMR
IUPTL receipt
DG of EBTKE(copy)
Construction
30 days
30 days
30 days
15 months
3 months
90days
Feed-In Tariff(<10MW):
1 8
Rp.1,075.0/Kwh x F
Factor F
9 20
Rp.750.0/Kwh x F
Java,Bali and Madura: 1.00Sumatera: 1.10Kalimantan and Sulawesi: 1.20West Nusa Tenggara and East Nusa
Tenggara: 1.25Maluku and North Maluku: 1.30Papua and West Papua: 1.60
(Source: JICA Survey Team)

Figure 2.3.1
Procedure for Small Hydropower Development
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2) Negative List
The latest version of the Investment Negative List, which entered into effect on April 24, 2014,
clarifies the situation regarding foreign direct investment (FDI) in the mini-hydro sector. Under the
previous version of the list, such investment was stated as being 100% open to FDI subject to a
partnership arrangement with a local firm.
However, as it was unclear what precisely was meant by a partnership arrangement, thus this tended
to discourage foreign investors. By contrast, the regulation states that the small hydro sector is now
open to up to 49% FDI.
3) Issues on Process of Appraisal and Approval
The current issues on the process of appraisal and approval for small-hydro IPPs can be identified as
follows:
When a developer has an issue on debt financing, the developer recognizes that the duration
from the agreement of PPA to the financial closure is short.
When the viability of a project has an issue on revenue and power tariff, the schedule for the
feasibility study may be delayed.
A developer identified the need for PLN and MEMR to strengthen their coordination in
providing a clear direction for the application of the regulations such as PPA.
2.3.2 PPA and Power Tariff

In 2012, the MEMR issued Ministry Decree No.4/2012 and fixed the purchase price of renewable
energy, which is aimed to enhance the development of renewable energy. Further, in 2014, a revision
on the portions of small hydropower was made through Ministry Decree No.12/2014, and PLN has to
purchase power at a fixed price from small-scale IPP having less than 10 MW.
The fixed purchase price is Rp1,075/kWh for the first eight years and Rp750/kWh for the succeeding
period up to 20 years. These fixed prices shall be multiplied by the regional coefficient. The fixed
purchase prices are as shown as below.
Table 2.3.1
Voltage/Capacity
Power Purchase Price for Small Hydropower Project

Feed-In-Tariff (Rp./kWh)
F Factor, Depending on the Location
General Small Hydro Projects
Medium Voltage
(up to 10 MW)
Year 1 - 8 : 1,075.0 x F
Low Voltage
(up to 250 kW)
Year 1 - 8 : 1,270.0 x F
Year 9 - 20 : 750.0 x F
Year 9 - 20 : 770.0 x F
Java, Bali, and Madura:

Sumatera:
Kalimantan and Sulawesi:
West Nusa Tenggara and
Nusa Tenggara:
Maluku and North Maluku:
Papua and West Papua:
1.0
1.1
1.2
East
1.25
1.3
1.6
(Source: JICA Survey Team based on the Regulation of the Minister of Energy and Mineral Resources of
Indonesia No. 12/2014)
The procedures necessary for implementing small hydropower projects such as required documents,
permits, approvals, and necessary period became clear.
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Due to this modification and clarification of the purchase prices and procedures, many have applied
for small hydro projects under FIT. In August 2014, the Government of Indonesia through MEMR
Regulation No. 22 of 2014 (Reg. 22/2014) revised the applicability of the FIT system to also cover
mini- hydro power projects utilizing multipurpose dams and/or irrigation channel water resources.
However, a lower FIT is applied for these projects.
Table 2.3.2 below summarizes the FIT currently applicable to small hydropower projects utilizing
existing structures. According to information source, there may be an ongoing review on the FIT price
by PLN as of the study period (February 2015). The review would examine the increase of tariff as
well as the currency for payment.
Table 2.3.2
Power Purchase Price for Small Hydropower Project Utilizing Existing Structures
Feed-In-Tariff (Rp./kWh)
Voltage/Capacity
F Factor, Depending on the Location
Small Hydro Projects utilizing
multipurpose dams and/or irrigation
Medium Voltage
(up to 10 MW)
Year 1 - 8 : 967.5 x F
Low Voltage
(up to 250 kW)
Year 1 - 8 : 1,143.0 x F
Year 9 - 20 : 675.0 x F
Year 9 - 20 : 693.0 x F
Java, Bali, and Madura:

Sumatera:
Kalimantan and Sulawesi:
West Nusa Tenggara and
Nusa Tenggara:
Maluku and North Maluku:
Papua and West Papua:
1.0
1.1
1.2
East
1.25
1.3
1.6
(Source: JICA Survey Team based on the Regulation of the Minister of Energy and Mineral Resources of
Indonesia No. 22/2014)
The salient features of the power tariff can be described as follows:

1) No Escalation
The FIT regulation explicitly states that the prescribed FITs, as set out above, are not subject to any
escalation. The existence of this provision will prohibit parties to agree on any tariff
escalation/indexation in the PPA. Consistent with this restriction, the standard PPA as published by
PLN does not provide for any escalation mechanism.
2) Transmission Responsibility
The FIT price needs to include the costs of procuring the transmission lines connecting the plant to the
PLN grid. Accordingly, hydro plants that are located close to an adjacent grid will be at a significant
cost advantage. On the other hand, if the transmission line is long, a project has more exposure to land
acquisition risks and will be less competitive.
3) Transitional Arrangement
Prices agreed for power supplied by small hydro plants prior to the coming into effect of the regulation
will continue to be governed by MEMRs Regulation No. 04/2012. However, prices may be adjusted
upwards (except in the case of a plant that has reached the commissioning stage) provided the project
sponsor first secures a designation by the directorate as hydropower producer. Such adjustment will be
based on an agreement between PLN and the project sponsor, but may not be higher than the weighted
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average price set out in the regulation, which is adjusted based on voltage and location. The new price
is fixed and must be directly set out in a PPA. It remains valid for the duration of PPA. The price
adjustment process must be completed within 90 working days of the designation of the project
sponsor as a hydropower producer. The adjusted price must also be approved by the Minister.
4) Hydro Power Plants of more than 10 MW
The power tariff from hydropower plants of more than 10 MW is stipulated in the MEMRs
Regulation (No.03/2015). The power tariff is charged at a maximum of US9.00/kWh for 10 MW to
50 MW, US8.50/kWh for 50 MW to 100 MW, and US8.00/kWh for more than 100 MW. The
purchase price is subject to the agreement between PLN and the developer.
2.3.3 Revision of PPA

PLN is currently revising the template of the PPA. The contents appear to be slightly modified
compared with the previous version. Out of the 315 projects that submitted their application,
approximately half of them have already signed the PPA. The major points can be identified and
reviewed as follows:
1) Termination of Agreement
The clause stipulates the conditions for contract termination. It raises the event when the buyer (PLN)
fails to make payment for three months. On the other hand, the penalty payment for PPA termination
is not mentioned. The event can be covered by the Civil Law of Indonesia (Clause No.1243), which
stipulates the claim for damages due to non-fulfillment of obligation.
2) Supplemental Document
The PPA requires a certificate of cash deposit of 30% of the paid-in owned capital. This condition
would raise the hurdle for developers, and the developers may wish to discuss the condition.
3) Issues associated with PPA
The issues identified by the developers and financial institutions can be summarized as follows:
Take-and-pay clauseThe impact on revenue has been identified in case the plants cannot sell
the scheduled energy due to the demand situation in the power grid.
The power tariff is low, hence, the developer cannot secure a financial return. (This tariff may
be being revised according to an information source.) PLN can consider a simple increase of
power tariff as well as a two-part tariff of the fixed payment based on the output capacity and
the energy production.
The feasibility study needs to deal with additional matters due to the request from the PLN
equipment related with the receiving purchased power since there is a need to confirm the
appropriateness of the current system.
The capacity of the transmission line may be insufficient to accommodate evacuation of

generated power by a small hydropower plant due to the location of the plant and sub-station.
This can be examined by PLN.
PLN may be able to take a proactive action for a project whose PPA will expire.
PLN could consider the power tariff payment in other currency other than Indonesian rupiah.
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In some cases SPCs have limited access to debt financing based on the credit record of SPC
and may be requested to submit a collateral by parent companies. Since the execution of PPA
may not be fulfilled by SPC alone, having a counterpart of the PPA may also be studied.
Some developers hope that PLN can strengthen its capacity for guiding the developers and
coordinating with the government offices.
2.3.4 Permission/License Required for Small Hydropower Business
In addition to the establishment of SPC (Special Purpose Company), the permissions and licenses
required for small hydropower business are as follows:
No.
1
2
3
4
5
6
7
8
9
Table 2.3.3
Name
Permission/License for Small Hydropower Business

Type
Licenser
Izin Princip
UKL&UPL
Izin Lokasi
HGB
IMB
HO
SIPTPP
SIPPA
HPO*)
(Hydropower Operation License)
10 IUPTLS
11 IUPTL
*) Tentative name because of no official name
Development permission
Environmental permission
Land acquisition license
Land register
Construction permission
Obstacle permission
River use permission
Water use permission
Local government
Local government
Local government
Local government
Local government
Local government
River administrator
River administrator
Hydropower plan permission
MEMR (EBTKE)
Provisional electricity license

Electricity business license
MEMR (Kelistrikan)
MEMR (Kelistrikan)
No.1 to No.8 can be processed in parallel and the period is estimated to be around 9 months.
No. 2 UKL&UPL is usually prepared during Pre-FS.
After No.3 Izin Lokasi, land acquisition is carried out and then HGB is obtained.
For application of No.9 HPO, No.1, Pre-FS report and No.3-N.8 are required.
In case that the project area includes public forest, Izin Pinjam Pakai (Forest Use Permission) from
the Ministry of Forest is required.
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Chapter 3 Parties Concerned with Small Hydro IPP Projects

3.1
Investor
To cope with the rapid growth in power demand, public funding for electric power development is not
enough. Then, the Indonesian government has issued Presidential Decree No. 37/1992 in order to
expedite participation of private companies into the power business, namely as IPPs business.
Afterwards, due to the increase of IPPs in 2013, the power supply from the IPPs has reached 24%.
According to government policy, the maximum use of renewable energy including hydropower, FIT to
purchase fixed tariff for renewable energy was introduced in 2012. Further, in May 2014, MEMR
issued Decree No.12/2014 in revising the part about small hydropower and PLN is obliged to purchase
at the fixed prices from small hydro power plants of less than 10 MW. Introducing the FIT system
means enhancing participation of private investors by buying at advantageous prices. In addition, rural
electrification and replacement of diesel power plants will be accelerated.
On the other hand, Presidential Decree No. 39/2014 (so-called Negative List) has been issued in April
2014. The decree stipulated that the maximum capital participation of foreign companies to IPP
developer (SPC: Special Purpose Company) is at 49% in order to protect Indonesian investors and
enhance incentives. As exemption, SPCs established before April 2014 can keep the original capital
ratio.
Based on these backgrounds, Indonesian private investors have high motivation to participate in IPP
business in which FIT is applicable. According to PLN information, 318 IPP projects under FIT from
the entire Indonesia have been submitted for approval, and pre-feasibility study (Pre-FS) and
feasibility study (FS) reports have been filed. Out of the 318 projects, 49 projects are now in operation,
49 projects under construction, and 220 projects are under before financial closure status.
3.2
Financial Institutions
It was found that they have some experience of funding small hydropower project with difficulties on
examination of loan application. Therefore, the corporate finance is more common than the project
finance.
3.3
Construction Equipment Manufacturer
Considerable numbers of Indonesian contractors are participating in capital of SPCs for hydropower
IPPs, however, it is hard to judge from the name of the SPCs only. Detailed information about SPC
will be confirmed. State-owned construction company, PT. Wijaya Karya is active in the IPP business.
There are not so much IPP applicable FIT projects under operation or under construction, as the
contractors are joining as the Contractor as their main business.
Participation of foreign contractors to IPPs is only for large-scale hydropower IPP as the contractor.
Participation of Korean companies as the contractor is remarkable. On the other hand, foreign
contractor participation to IPP project under FIT is almost nil.
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Many developers planned to employ domestic civil construction contractors for the construction work.
A few of them have plans to use the Chinese contractor by mobilizing the debt from China. Some
developers undertake the design and engineering work on their own and outsource the construction
work only, while for developers who do not have a construction team, a leasing company for
construction equipment will construct the plant on its own using their own equipment and staff. Thus,
the mode of the construction varied depending on the resources and situation of the developers.
3.4
Equipment Suppliers/Manufacturer
Equipment manufacturers/suppliers are participating as the contractors to IPP as per normal activity.
Gates and penstock can be produced by domestic companies. Both domestic and foreign companies
can design, manufacture, and install gate facilities. On the other hand, turbines, generators, and related
equipment should be relied on foreign companies and design and manufacturing shall be by a foreign
company except for some minor portions.
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Chapter 4 Selection and Identification of Small Hydropower

Projects to be Promoted
4.1
General
The issues for selection and identification of potential projects are: i) technical aspect, ii) organization
and financial aspect, and iii) environmental aspect. In addition, the possibility of project bundling is
considered.
For the technical aspect, i) annual rainfall, ii) design discharge, iii) waterway length, iv) capacity and
power generation, v) unit cost of construction and electricity, and vi) transmission line have been
examined. In addition, detailed examination was carried out for potential projects. With regard to the
organization and financial aspect, i) organizational capacity, ii) financial capacity, iii) status of project
preparation, and iv) investment scale have been examined referring to the results of individual
interviews in addition to the general review. For the environmental aspect, all projects must have
already passed their initial environmental examination and it is assumed that there is no serious
environmental problem. Therefore, related information such as UKL/UPL and FS was reviewed and
environmental issues of the projects were examined.
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PLNlist
Project Information(FSetc.)
Technical
aspect
Organization and
Finance
Environmental
aspect
Complehensive
evaluation
Data collection
Generalreview
Data collection
Generalreview
Project bandling
1stselection
Evaluation
Evaluation
2ndselection
Detailed
evaluation
PotentialProjects
Figure 4.2.1
Flow of Project Screening

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Chapter 5
5.1
Financing Structure for JICA-PSIF
Credit Overview for Small Hydropower Independent Power Producers

(IPPs) in Indonesia
1) Construction Risks for Small Hydropower Facilities of IPPs

The risk, which may have the most significant impact to the profitability of project, is the initial
capital expenditure (CAPEX) for the construction of the IPP facilities because the revenue side of the
cash flow is practically assured under the FIT system. It should be confirmed during the appraisal
process that insufficient feasibility study (FS) may cause serious problems such as cost overrun of the
construction. In general, the construction consists of three parts: i) steel works such as gate and
penstock, ii) mechanical works such as turbine and generators, and iii) civil works such as
construction of waterway, etc. The cost estimation of steel works and mechanical works can be
regarded at a somehow reliable level. However, careful examination is needed for the civil works
because it changes largely by reflecting the land and other geographical conditions of each project.
There are some helpful selection criteria that were used in this report for establishing the list of
potential IPP projects. A pre-screening is conducted by using obvious and easily-obtainable data, such
as the length of waterway, penstock, and electricity transmission line to the transaction point of PLN,
in order to confirm the basic geographical conditions. After the pre-screening, it should be confirmed
that the estimated costs are below the benchmark cost of Rp30 billion from a reputable constructer.
Moreover, the construction risks will be further mitigated if a guarantee is provided for completion of
the construction, but it is subject to negotiations with the developer.
2) Drought, Flood and Discharge Risks
In order to ensure the revenue in the cash flow projection, it is important to take into account drought,
flood, and other discharge risks in small hydropower IPP projects. Sometimes, sufficient discharge
data may not be available in small rivers for small hydropower IPPs, and practical treatment should be
made on a case-by-case basis by referring to similar projects. Engineering analysis with regard to the
discharge risks is important, but it is also worth considering a financial solution such as increasing the
provision for the Debt Service Reserve Account in order to cover the drought risk for one or two
years.
3) Risks Related to PPA to be Signed with PLN
PLN is currently working on updating its template form of the PPA. The contracting conditions in the
PPA templates will apply to most of future small hydropower IPP projects, and therefore the risk
analysis for the PPA provides a global and comprehensive approach to the projects. First, before
entering into the details of the PPA, the credit risk assessment of PLN should be conducted such as
whether it has financial capacity to properly deliver the purchase obligation as stipulated in the PPA.
According to its financial statement, PLN largely depends on government subsidy and other financial
support. However, this report does not elaborate on this issue anymore because PLN maintains a credit
rating of investment grade of BBB-, which is as good as the sovereign rating of Indonesia by the
global credit agencies such as Moodys and Fitch. The next step is to examine the details of the PPAs
contracting conditions and the procedures for daily operation, which were discussed in Chapter 2 of
this report. Because there are concerns for most of the developers, it may be possible to rely on the
analysis if it is conducted by experienced developers. It also includes clauses on insurance as well as
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on events such as force majeure. Finally, the situation where the project SPC runs into financial
difficulty should be examined, and the loan-providing banks should consider execution of collateral
for recovery of the loan. This issue is not for the developers and therefore, it is extremely important for
the banks to carefully examine their own resources.
z
According to Article 19 of the PPA template, which is under review by PLN, the termination of
the PPA occurs if the project SPC (referred to as SELLER in the PPA) runs into bankruptcy or
other similar situation. If the termination of the PPA occurs, the termination of purchasing
obligations of PLN under the FIT system occurs accordingly. It is an extremely serious situation
for the bank because the small hydropower IPP facilities become practically of zero value without
the FIT system.
ARTICLE 19 AGREEMENT TERMINATION
1. Each of the following events is the SELLERs failure which may result in this AGREEMENT
TERMINATION:
a. (omitted)
b. (omitted)
c. the occurrence of the following events: (i) the passing of judgment on bankruptcy, financial
inability, liquidation process, or liquidation or other similar events related to the SELLER; (ii)
appointment of trustee, liquidator, custodian, temporary officer to implement the process set
forth in point (i), where such appointment is not revoked or survives for more than 60 (sixty)
CALENDAR DAYS, or (iii) court order to execute liquidation process, or confirm bankruptcy
or financial inability, where such order is not revoked or survives for more than 60 (sixty)
CALENDAR DAYS.
On the other hand, special consideration, as stipulated under Article 18 of the PPA, is made for
the lender of the loan in financing the construction of small hydropower IPP facilities.
ARTICLE 18 ASSIGNMENT OF AGREEMENT
1. (omitted)
2. (omitted)
3. If in the performance hereof, the SELLER assigns and delegates part or all of its rights and
obligations to any OTHER PARTY without the BUYERs prior written approval, the BUYER
may unilaterally terminate this AGREEMENT, save such assignment and delegation are
obliged by the lender in connection with POWER PLANT construction financing.
(underlined by the JICA study team)
One of the simple interpretations of these articles in a manner, which are rather favorable for the banks
is that the project SPC under financial difficulty should sell its project assets to a third party by
following the order of the bank in accordance with Article 18 before it goes into real bankruptcy as
stipulated in Article 19. Then, it is possible that the assignment of the PPA will be made after the sales
of the project assets, and the purchasing obligation of the PLN continues under the FIT system in
accordance with the PPA. Another interpretation may be that Article 18 applies only when the project
SPC were to assign the PPA to a third party and does not apply when 100% of the shares of the project
SPC were to be sold to the third party without changing any legal status of the project SPC under the
PPA. On the contrary, such an interpretation may be opposed by PLN because the share sales of the
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project SPC may practically have the same impact of the assignment of the PPA. Obviously, these are
the issues that should be consulted with Indonesian lawyers, but what is important is that the
loan-providing banks should secure the legal status where the value of the project assets would not be
seriously deteriorated.
4) Sponsor Risks of the Developers
It should be examined if the developers have the necessary engineering capacity and operational
organization to carry out a small hydropower IPP project. It is often the case where the developer
becomes the operator of the IPP facility. The developers experience on hydropower operation should
also be examined. Furthermore, the financial capacity of the developers should be confirmed in order
to pay down the equity contribution of the project SPC, but the risk will be mitigated if the
disbursement of the loan occurs only after the equity is fully paid.
Other procedures and items to be confirmed are described below.
5)
Legal Risks for Real Estate-related Contract, Water Utilization and Other Licenses
Including Those by the Local Government
A stable business environment is indispensable for the project to generate the revenues estimated in
the cash flow projection. For this purpose, it should be confirmed during the appraisal process that the
legal status have been clarified such as land and water utilization rights and other authorization or
licenses, including those from the local government. Sometimes in developing countries, these legal
issues are not as rigid as in developed countries. In such a case, it may be realistic to accept the normal
banking practice in the local market.
6) Environmental and Social Risks

It should be confirmed that no serious issues exist with respect to the environmental or resettlement
action plan.
7) Ability to Properly Respond to an Accident or Natural Disaster
It should be confirmed that the action plans or manuals are/will be prepared for unexpected accidents
and natural disasters as well as the insurances. In practice, it may be reasonably assumed that the
experienced developers have sufficient capacity with regard to these issues.
5.2
Issues in the FS and the Transaction Costs for Small-scale Projects
In consideration of the financing structure for small hydropower projects, the transaction costs such as
for FS, due diligence, and legal fees for loan documents, including the collateral agreements are the
most important issues from a practical banking point of view. In a typical type of project financed by
investment banks in the private sector with loan amount of US$100 million, for example, it is
anticipated that the FS and other transaction costs are approximately 2%-3% of the total loan amount,
which is approximately US$2-3 million. The transaction costs should cover all the necessary credit
risk analysis as discussed in the previous section of this report.
On the other hand, it should be strongly mentioned that the issues to be covered does not change in the
credit appraisal process of the project financing. For example, a project financing of US$10 million
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requires almost the same degree of rigor in the credit appraisal process as that of US$100 million, and
therefore, the FS and other transaction costs should be almost the same amount. Approximately
US$2-3 million of the transaction costs represent 2%-3% in the project financing of US$100 million,
but they represent 20%-30% of the US$10 million, which seriously deteriorates the profitability of the
project. For small hydropower IPP projects regulated under 10 MW in Indonesia, the maximum initial
investment should be limited below Rp300 billion, which is calculated by applying the benchmark of
Rp30 billion/MW, as discussed in the previous section. Therefore, the project financing loan amount
would be approximately Rp150-210 billion, which correspond to 50%-70% of the initial investment of
Rp300 billion. In such small-scale project financing, it is important to secure the sufficient FS and
other transaction costs.
One of the solutions to the transaction cost issue is provided by JICA through the public offering
initiative in the public-private partnership (PPP) infrastructure preparatory study, which supports up to
JPY 150 million for FS to potential developers of various infrastructure projects. Some may claim that
the support of JPY 150 million does not fully cover the necessary costs, but it certainly help the
developers burden for FS and other transaction costs. Another approach may be considered by
combining a few small hydropower projects to arrange a medium-scale project financing loan. In the
next section, some financing structures will be studied for this purpose based on various efforts by the
financial institutions in the Indonesian financial market.
5.3
Financing Structure for Several Small Hydropower IPP Projects
1) Financing Structure for Equity Investment

Firstly, it is worth considering an investment to a fund, in which IFC and other governmental
development assistance agencies participate in the same status as private sector investors.
JICA
IFC
Development Agencies
in Europe
Private Sector
Investors
Fund investment
Investment Fund (Armstrong etc.)
Equity investment to projects
Project
Project
Project

Figure 5.3.1 Equity Investment Structure via Fund
There are some technical issues on this scheme such as limited timing for application because
renewable energy funds are often raised in closed form, in which investors can submit application only
within an application period.
2) Financing Structure for Bank Loan
The two-step loan scheme is recommended in order to encourage these Indonesian banks to work on
project financing. As a pre-condition, it should be mentioned that the target project for lending is small
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hydropower IPP with equity contribution by Japanese investors at a certain percentage, which
differentiates the project target from the two-step loan that has been already implemented by the
French development assistance agency AFD.
JICA / PSIF
Loan
[Issues, which Intermediary
Intermediary Banks (SMI, IIF)
Banks take main role]
(1) Construction costs and
Project Financing Loans
completion risk
(2) Water flow risks
Project
Project
Project
(4-2) Indonesian
sponsor risks
[Issues, which JICA takes

main role]
(3) PPA-related risks
(4-2) Japanese sponsor risks

Figure 5.3.2 Financing Structure of Two-step Loan for Several Projects
As for the credit appraisal process, all the credit issues in the project financing approach should be
covered in an appropriate manner, but adequate segregation of roles should be discussed between
JICA and intermediary banks in order to avoid overlapping roles, which may cause increasing the FS
and other transaction costs. As mentioned in Section 6.1, the main risks are as follows:
Construction risks for small hydropower IPP facilities
Drought, flood, and discharge risks
Risks related to the PPA to be signed with PLN
Sponsor risks of the developers
[Issues, which JICA takes main role]
Among other credit risks, it is recommended for JICA to be mainly responsible for (3) Risks related
to the PPA to be signed with PLN because the template form of the PPA has been already publicly
announced by PLN and it covers all the future small hydropower IPP projects in a comprehensive
manner. If there is any serious credit issue, which may be identified in this phase, there is no need to
go further in the credit appraisal process, including the engineering appraisal mostly conducted by the
intermediary banks.
In general, the credit appraisal process should not be conducted only by analyzing the contract, but it
should be based on the specific project file in order to avoid idealistic arguments. However, a small
hydropower IPP project is an exceptional case because the sales risk of the project SPC is mostly
mitigated by the FIT system as defined in the PPA, and therefore the assumptions for the cash flow
projections are foreseeable. Moreover, there are some files, which are already reviewed by the PPP
infrastructure preparatory study and it is relatively easily anticipate the specific features of the project.
In this context, it is recommended to conduct credit analysis based only on the PPA in exceptional
cases.
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The issue of (4-2) Japanese sponsor risks is also recommended for JICA to take a main role for
tackling the issue because most of such risks are often related to Japanese companies.
[Issues, which the intermediary banks take main role with JICAs support]
Among other risks, it is recommended that (1) Construction risks for small hydro IPP facilities and
(2) Drought, flood and discharge risks should be taken by the local intermediary banks because
these are mostly related to engineering issues, which are reflected by the topographical conditions of
each project site. It is practical to assume that the engineering works should be done by the consultants
who know the local conditions and the intermediary banks confirm the validity. The overall procedure
should be reconfirmed by JICA, which may also provide various advice if needed. As a conclusion, it
is expected that all the credit issues should be covered without duplication. The other issue of (4-1)
Indonesia sponsor risks is also recommended for JICA to take a main role for tackling such issue
because most of these risks are often related to Japanese companies.
With regard to the proposed credit guidelines for intermediary banks, it is recommended to include the
following items.
(1) The involvement by Japanese company to the project SPC with XX% or more equity contribution,
or other commitment to the management, which is explicitly confirmed such as secondment of
board member, who is based in Indonesia if possible.
(2) The intermediary bank receives JICAs capacity development program in the similar manner as
AFDs two-step loan.
(3) The necessary measures have been taken to mitigate the construction risks, such as completion
guarantee by a stakeholder who has strong financial bases, action plan is prepared for capital
increase in case of cost-over-run, favorable opinion from engineering review by a reputable
consulting firm and so on.
(4) Other issues raised at the appraisal process of the PPA related risks.
The proposed credit guideline is more focused on the engineering issues because it is assumed that
JICA goes through the appraisal process of the PPA related before entering into the detailed
negotiation with the intermediary bank. (1) is to confirm the Japanese involvement for PISF program
of JICA. On the other hand, the final decision should be made by its own discretion without too much
influenced by the credit guideline because the intermediary bank fully takes the credit risk under the
two-step loan scheme. But, the capacity building program should be provided if the intermediary bank
does not have sufficient experience in project financing.
5.4
Financing Structure for Several Projects Initiated by a Single Developer
A single developer that is considering to conduct several small hydropower IPP projects in the same
river basin may be referred to the same technical data for (2) Drought, flood and discharge risks,
which may contribute to the reduction of the FS cost. It may be applied for both direct loan structure
under JICA-PSIF as well as two-step loan via local intermediary banks.
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JICA / Intermediary Banks

Loan
Holding Company
Inter-Company Loans
Project
Project
Project

Figure 5.4.1 Financing Structure for Several Projects Initiated by a Single Developer
However, it is advised to be identical for the developer because a holding company should be
established for bundling the SPC of each project. The holding company will be the borrower of the
JICA loan and the repayment sources will be served from the total cash flow of each project, and
therefore it may be considered as if each SPC cross guarantees the holding companys loan. If the
equity contributors are different among the projects, it will be difficult to provide the cross guarantee
among the project SPCs.
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Chapter 6
Preliminary Action Plan
Based on the survey results, the preliminary action plan considering the permissions/approvals
procedure for small hydropower development in Indonesia, timing for project participation by
Japanese companies, and procedures for JICA-PSIF was examined. Even though the actual
development schedule seems to be different due to past revisions of regulations and individual
situations of the various projects, a typical schedule for small hydropower development is shown in
Figure 7.1.1 below. The development is divided into five stages, from project identification to project
commissioning, as illustrated in the figure.
No.
Item
1 Project Identification
2 SPC establishment
3 Principle permit
4 Pre-FS, UKL&UPL
5 Location Permit
6 Land acquisition
7 Permissions (IMB, HO, SIPTPP, SIPPA)
By
Developer
Developer
1st Yr
2nd Yr
3rd Yr
4th Yr
5th Yr
2 4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12
Development
stage
Local gov.
Developer
Local gov.
Developer
Local gov., River authority
8 HPO Application with Pre-FS to MEMR(EBTKE) Developer

9 Technical verification of Pre-FS
PLN
10 HPO Approval by EBTKE
MEMR(EBTKE)
11 Deposit
Developer
12 IUPTLS
MEMR(Kelistrikan)
Proposal
stage
ProessPPA
stage
13 FS
Developer
14 FS submission to PLN (incl. other required docs) Developer
15 PPA
Developer, PLN
16 Share holders agreement
Developer, Japanese company
17 Financial arrangement by JICA-PSIF

18 Financial closure
JICA
Developer
19 IUPTL
MEMR(Kelistrikan)
20 DD, Bid docs

21 Bidding of contractor
22 Construction
23 COD
Developer
Developer
Developer

Figure 6.1.1
Processfinancing
stage
Implementation
stage
Example of Schedule of Small Hydropower Development
Development stage
In this stage, project identification, establishment of special purpose company (SPC), acquisition of
principle permission, pre-feasibility study (pre-FS), approval of UPL/UKL, land acquisition and
acquisition of necessary permissions (IMB, HO, SIPTPP, SIPPA) shall be carried out. In case that a
Japanese company prefers to participate in greenfield projects, it is expected that the Japanese
company joins to carry out the pre-FS and then continue to develop the project together. In addition, it
is realistic that the local developer takes care of land acquisition and acquisition of the
abovementioned permissions.
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Proposal stage
The SPC submits the pre-FS, UPL/UKL, and other necessary documents to EBTKE (New/Renewable
Energy Department, Ministry of Energy and Mineral Resources), and HPO (Hydropower Operator
Approval) is issued to the SPC through technical verification by PLN, and then the SPC shall be
approved as the hydropower operator. For effective scheduling, depending on the reliability of the
pre-FS, the feasibility study (FS) shall be carried out in parallel with the activities in the development
stage. In case a Japanese company prefers to participate in brownfield projects, it is expected that the
Japanese company joins to carry out the FS and then continue to develop the project together.
PPA stage
After the HPO is issued, the SPC shall pay the deposit (equivalent to 5% of the total investment
amount) to EBTKE, and then the IUPTLS, which is a temporary power supply business license, is
issued to the SPC. In general, the FS is finished in this stage. In case that a Japanese company prefers
to participate in brownfield projects, the Japanese company as investor should decide up to this stage.
In the FS, the specifications and cost of equipment shall be almost fixed, therefore, project
participation as equipment supplier should also be promised up to this stage.
In the FS, the following issues should be carefully examined:
;
Available discharge for power generation

The estimation of available discharge for power generation is one of the most important issues in
hydropower planning. In case of overestimation, the required power generation capacity and
energy may not be available, and therefore the project would become not feasible.
Function and stability of structures

Fulfillment of the required functions of each structure should be carefully confirmed. In case of
insufficient or over design, appropriate modifications are necessary. In order to ensure long-term
safety operation, treatment of weak geology, protection of high-excavated slopes, and crossing
structures of waterways are carefully examined.
Financing stage
After the PPA is concluded, debt financing becomes possible. At this moment, corporate financing by
local banks seems to be common in Indonesia. In case of application of JICA-PSIF, it may take time to
examine the loan application. Therefore, earlier related actions including investment to the SPC by a
Japanese company are preferable in parallel with the activities in the PPA stage and immediately after
confirmation of almost all FS results. It is noted that the timing of acquisition of IUPLT is not critical
in the schedule.
Implementation stage
After the financing of the project is finished, the construction shall be started through bidding of
contractors. The financing may take time in general. Therefore, the detailed design and preparation of
bidding documents better to be carried out in terms of effective schedule. In case that the contractor is
a local Indonesian company, the selection of capable contractors and establishment of quality control
system is important. Moreover, it is necessary to examine schemes preventing troubles during
construction and delays such as the bidding conditions fixing the construction method and equipment.
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In addition, the following actions are required from the Indonesian and Japanese sides:
Indonesian side
a) Confirm the situation of project preparation such as financing, engineering, procurement
management, and project management, and identify the needs for reinforcement. Request
appropriate assessment and consultation of experts.
b) For the above needs, examine the possibility of collaboration with the Japanese side in order to
solve problems. Request appropriate consultation from JICA and experts.
c) In parallel with the project stages, prepare the contract conclusion in collaboration with the
Japanese side. Include preparation of JICA-PSIF.
Japanese side
a) Review the FS report of the project.
b) Examine the needs of the Indonesian side, level, timing for projects and developers, and then
screen considering the company strategies and resources.
c) Contact and consult the developer on future collaboration.
d) In parallel with the project stages, prepare the contract conclusion of the collaboration with the
Indonesian side. Include preparation of JICA-PSIF.
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Nippon Koei
KRI International
Guideline for Feasibility Study for Small Hydropower Project

(Draft)
Though the captioned survey, various feasibility study reports for small hydropower projects are preliminarily evaluated.
Referring to the survey work, the
required information and data to be included in feasibility study report and how to preliminarily evaluate them are summarized below.
Item
1.0
Required Information/Data
Evaluation
INTRODUCTION
1.1
2.0
Background, Objectives,
Background, Objectives, Scope of Work are described Verify the description of the information/data.
Scope of Work
briefly and comprehensively.
STUDAY AREA CONDITIONS
2.1
Geographic features
Administrative information etc. are described briefly and Verify the description of the information/data.
comprehensively.
2.2
Socio-economy
Population, Gross domestic product etc. are described Ditto

briefly and comprehensively.
2.3
Power situation
Power demand, Power generating facilities, Electrification Ditto

situation etc. are described briefly and comprehensively.
3.0
SITE CONDITIONS
3.1
Site Conditions
General condition of the project site (topography, land Verify the description of the information/data.
use, existence of local people) is investigated and
described.
3.2
Site Access
The project location and access to the project including Verify the description of the information/data.
information of administrative area, close major city, land
route to the site with distance, road condition (width,
pavement condition) are described.
The
information
especially
for
transportation
of
equipment (bridge, cross drain, topography of both sides

of road, town/village on the route) is included.
If transmission line route is assumed, condition of the
route is described.
3.3
Topography
3.3.1 Regional Topography
Regional topography around the project area including Verify the description of the information/data.
any lineament to show fault and special topography of Regional topography may affect the overall project layout.
land slide is examined.
3.3.2 Topographic Survey
Topographic survey is carried out and make topographic Verify the description of the information/data.
map. Topographic map needs to be 1/1,000-1/2,000 scale The topographic survey with the required accuracy is
for general layout covering in and around the project indispensable for FS stage.
and 1/100 -1/500 scale for design of structures.
For the survey, bench marks need to be firmly established.
The survey records such as bench marks, triangle points,
base points, survey points including survey method and
used equipment need to be kept for clarification.
Information of geological investigation (location of core
boring, seismic exploration lines) is also included in the
topographic information.
3.4
Geology
3.4.1 Regional Geology
Regional geology is investigated. Geological map of Verify the description of the required information/data.
1/250,000 scale is commonly available. General geology Regional topography may affect the overall project layout.
around the project is examined. Special geological
condition such as existence of large fault needs to be
carefully confirmed.
3.4.2 Geological Investigation
The related available data (geological map, record of In order to properly design the structures, geological
earthquake, activity of volcano) are collected.
information derived from the geological investigation
Record of site reconnaissance includes geological shall be verified.

property from the outcrop, existence of fault, possible Verify geological information for examining the project
land slide and water spring. Degree of weathering and layout then structure design shall be specified.
depth of over burden is also estimated. Detailed
geological condition is investigated by core boring
together with geological test and seismic exploration if
necessary.
Major structures shall be founded on the sound rock. Core
boring with SPT (Standard Penetration Test) and water
pressure test are carried out; 3-5 holes at the intake dam,
several holes at waterway and penstock, at least 1 hole
each at head pond, and powerhouse site. The number may
be increased at the site with special geological condition.
Depth of bore holes shall be deeper than the rock surface
by 5m at least. Laboratory test is carried out for the
sampled materials. Seismic exploration will be carried out
if waterway is planed as tunnel type or to be located at
special geological condition.
All results of geological test and laboratory test need to be
included in the FS report.
3.4.3 Site Geology
Geological condition at each structure site is specified. Intake site requires sound rock foundation and water
Sound rock surface at each structure site is investigated tightness. Depth of river bed deposit is also investigated.
Depth of overburden (soil, weathered rock) along
and estimated.
waterway is estimated; excavation volume is subject to

depth of the over burden. Possible land slide along the
waterway needs to be examined. Geological condition at
head pond, penstock especially anchor block shall be
investigated. Powerhouse shall be founded on the sound
rock.
3.5
Meteorology and
Hydrology
3.5.1 Study Area
River catchment area, length of main stream and each Verify the description of the information/data.
tributaries, average slope, and average basin elevation
based on topographic map with 1/25,000 or 1/50,000
scale.
These data are used as parameters of low flow and flood
flow analysis.
3.5.2 Meteorological Data
Monthly meteorological data in and around the river Verify the description of the information/data.
The data are used for hydrological analysis. All collected
basin.
The meteorological data is 1) monthly mean temperature, data shall be attached to the FS report.
2) monthly maximum temperature, 3) monthly minimum
temperature, 4) monthly mean humidity, 5) monthly mean
wind speed/direction, 6) monthly mean sunshine hour, and
7) monthly mean evaporation.
The data are classified into 3 items by every year and
figured; 1) Complete data, 2) Incomplete data (including
missing data), and 3) Data not available.
3.5.3 Rainfall Data
Daily rainfall data in and around the river basin for low The estimated annual rainfall will be more accurate when
several rainfall stations exist around the project site. But,
flow and flood flow analysis.
Hourly rainfall data for design flood hyetograph of flood the estimation shall be inaccurate when there is few or no
rainfall station around the project site.
flow analysis, if available.

The collected data is verified in terms of applicability for
analysis. Typical way for data verification is double mass
curve method. Through the verification, abnormal data are
rejected.
Evaluation of annual rainfall:

1) The annual rainfall is estimated from records of rainfall
stations when more than two rainfall stations exist
around the project site commonly by Thiessen method.
2) The annual rainfall is estimated from the isohyetal map
created by BMKG when less than one rainfall station
exists around the project site.
3)20% of difference between the annual rainfall in FS
and the above estimated rainfall is to be a permissible
range.
3.5.4 Runoff Data
Daily river water level data, daily discharge data, and H-Q The required discharge data in the project river basin and
(river water level - discharge) curve to convert river water vicinity of the river basin are compiled. If data is not
level into discharge in and around the project river basin.
enough, supplemental data shall be referred.
Hourly river water level data and hourly discharge data

for calibration of flood flow analysis, if available.
3.5.5 River Flow Measurement
Data of river flow measurement at water level gauging Verify the description of the information/data.
station site. Frequency of the measurement is 2 times in a The required data shall be used for hydrological analysis.
month at the minimum. The H-Q curve needs be properly
updated by result of the measurement.
3.5.6 Low Flow Analysis
For low flow analysis, F.J. Mock method and Nreca Evaluation of design discharge:
method are popular in Indonesia. These methods are half 1) The design discharge shall be evaluated considering
monthly or monthly basis, therefore these are applicable
runoff coefficient. If there is a large deviation between
for Pre-FS stage. Daily basis analysis is required for FS
the design discharge and the estimated average
stage.
discharge considering probable runoff coefficient
Referring to the available discharge data of water level
(50%), it is considered that there are basic mistakes on
gauging stations in and around the project river basin,
the data, calculation, and estimation method for the
discharge at the project intake site is calculate by
design discharge.
catchment area ratios between the water level gauging 2) The design discharge less than 1.5 times of the
station sites and the project intake site.
estimated average discharge is to be a permissible
Based on the estimated discharge, Flow Duration Curve
range.
(FDC) is prepared for examination of design discharge

and calculation of annual energy production.
3.5.7 Flood Flow Analysis
Probable flood discharge for design of spillway and Evaluation of flood discharge:
powerhouse shall be estimated. The probable rainfall is Adequacy of the estimated design flood discharge shall be
generally estimated using Gumbel or Log Pearson III evaluated by Creagers Curve. Range of Creagers
methods. Those methods are common in Indonesia.
coefficient (=C) in Indonesia is 20 to 100.
For flood flow analysis, Nakayasu unit hydrograph Probability of flood discharge for intake weir and
method is common in Indonesia.
3.5.8 Sedimentation
powerhouse is generally 100 years.
Sampling survey for suspended load and riverbed material Based on the survey result, sand flush gate at intake and
survey is desirable for examining abrasion prevention sand trap basin shall be suitably designed.
countermeasure of turbine and generator. The sand trap
basin is designed considering the survey result.
4.0
HYDROPOWER PLAN FORMULATION
4.1
Layout
Run-of-river type
is generally
applied
for small Evaluation of project layout:
hydropower project.
In this survey, the following value is used for evaluation.
Based on the topographic and geological condition,

general layout of civil structures is examined and
Length of waterway headrace penstock x 2

plant discharge x head
optimized using discharge data from result of low flow This value is expected to be less than 10 for project
analysis. In order to optimize the layout, alternative study feasibility.
for several layouts is carried out. Penstock costs Intake location at start of rapid flow of river is preferable.
prominently and therefore shorter penstock for the head is It is also noted that the layout should be avoid high and
theoretically economical.
huge excavation.
High water level at intake weir and Tail water level at

tailrace are decided to match the topographical condition
of the project site.
4.2
Plant Discharge
Based on the result of low flow analysis, daily (monthly) In general, maximum plant discharge is set so that the
discharge is calculated and the FDC is established.
flow utilization factor (FUF) at the project site is
Based on the FDC, alternative study for several maximum approximately 70% even though the maximum plant
plant discharge is carried out in order to optimize project discharge shall be set based on the result of alternative
study.
scale.
4.3
Installed Capacity and
Based on the layout and maximum plant discharge, In order to correctly estimate energy production,
Energy Production
installed capacity and annual energy production is maximum plant discharge, head losses, efficiencies of
calculated. Head loss in the waterway and efficiencies of turbine and generator shall be properly set and seasonal
turbine and generator shall be considered.
and annual change of river discharge shall also be

simulated.
5.0
BASIC DESIGN
5.1
Civil Works
5.1.1 Intake Weir and Intake
1) Intake Dam (Weir)
1) Intake Dam (Weir)

The following issues shall be appropriately examined.
a. Layout
a. Layout
Layout shall be proper to the river course. It is better
b. Foundation
to locate straight portion as practicable.
c. Dam shape
b. Foundation
d. Dam material
Foundation shall be sound rock. Special treatment

such as grout is not common for small hydropower.
c. Dam shape
Downstream slope more than 1:0.75-0.8 is desirable
and dam stability shall be checked. Top elevation of
the non-overflow section is decided to have enough
free board (1.0 m or more) to the flood water level.
d. Dam material
Wet
rubble masonry
covered
by
concrete
is
acceptable.
2) Spillway
2) Spillway
a. Design flood
a. Design flood
Return period of design flood shall be 100 years and
b. Type
flood discharge per meter of spillway shall be less
c. Width
than 100-150 m3/s.
d. Stilling basin
b. Type
Non-gated ogee crest type is common for small
hydropower.
c. Width
Width shall be nearly same with river width.
d. Stilling basin
Stilling
basin
shall
be
designed
to
adjust
topographical and geological conditions. If geological

condition in downstream of stilling basin is not good,
further protection measures are required.
3) Sand Flush Way
3) Sand Flush Way

a. Bottom elevation
a. Bottom elevation
Bottom of sand flush way shall be lower than that of
b. Dimension
power intake to flush sediment in the reservoir.

Difference of elevation between bottom of sand flush
and power intake is more than 2 m.
b. Dimension
Sand flush way shall have appropriate dimension to
flush sediment and equip the gate.
4) River Diversion
4) River Diversion
River diversion during construction shall be planned
a. Method
considering intake dam structures, topography and
Stage river diversion by open channel is common for
construction period.
small hydropower. Discharge capacity of each stage
shall be confirmed.
a. Method
If
b. Return period
excavation, the tunnel type river diversion is
stage
river
diversion
cause
huge
volume
considered.
Layout of the river diversion does not disturb the
layout the permanent structure. Closing measure of
the river diversion so considered.
b. Return period
Return period of design flood shall be 5-10 years
depending on the construction schedule.
5.1.2 Power Intake and Sand
Trap
1) Power Intake
1) Power Intake
a. Layout
a. Layout
Layout shall be perpendicular to river or parallel to
b. Dimension
intake dam axis.
c. Elevation
b. Dimension
Power intake shall have appropriate dimension.
c. Elevation
Bottom of power intake shall be set 1m or more
higher than the sand flush way.
Approach velocity shall be at around 1.0m/s.
2) Sand Trap
2) Sand Trap
Necessity of sand trap shall be examined and number
If river water is clean, the sand trap may be omitted.
of sand trap bay shall be studied.
Two or more number sand trap is desirable.

Outlet of sand trap shall be higher than the river
elevation, if not, flow velocity of sand trap is not
enough and sand trap function will be down.
Dimension of sand trap is correct. Target particle size
shall be 0.5mm or less and flow velocity in sand trap
shall be 0.5m/s or less and depend on length of sand
trap.
5.1.3 Headrace Channel
Type
Route
Type of headrace as open channel or tunnel shall be
Selected headrace channel route shall be appropriate
studied. Usually, small hydropower project selects an
based on the topographic and geological conditions.
open channel type waterway. However, if huge volume

excavation due to steep topography, land slide and poor
geology on the headrace route are expected, a tunnel type
shall be considered.
Section
As for typical section, if geological condition is good, In terms of the project layout, length of headrace
trapezoidal section leaning on the both excavation face channel/head is checked and the value less than 10 is
with wet rubble masonry is adoptable. If geology if not so preferable.
Section
good, the reinforced concrete U flume is adoptable.
Typical section is leaning trapezoidal type or concrete
Crossing
The headrace crossing the deep river/valley shall provide flume type. Independent wet rubble masonry wall is not
the waterway bridge or siphon. Appropriate cross drain appropriate.
structure shall be provided at the crossing of small
rive/valley.
Slope and flow velocity
The slope of open channel shall be around 1/1,000 at
Along the headrace channel, access road shall be bottom. Flow velocity is around 1.0-1.5m/s.
constructed for construction and maintenance purposes.
River/Valley crossing structures are designed correctly,
Possible landslide along the waterway route shall be and not disturb flowing of the flood water.
checked.
If there is some possibility of land slide, appropriate

countermeasure shall be designed.
5.1.4 Head Pond
Location
Location
Head pond is located at the end of the headrace channel Location of head pond is selected to suit to topography
and the beginning of the penstock.
and geology and minimize the length of penstock.
Function
Capacity
Head pond functions to supply water when power Volume of head pond shall have about 3 minutes of the
generation operation is started and waste surplus water Plant discharge in general.
when power generation is downed or stopped. In addition, Structure
Head Pond has sand trap function.
Reinforced concrete structure is desirable.
Spillway
Spillway
Spillway of Head Pond shall have capacity equal to Plant Spillway and chute way of Head pond have enough
Discharge and chute way to the river shall protected capacity and are correctly designed.
appropriate structure.
Inlet of Penstock shall have water depth more than 2 x

diameter of Penstock.
5.1.5 Penstock (Anchor Block)
Route
Length
Route of penstock shall be selected properly. Longer
Layout and length of penstock shall be studied
penstock is costly and cause unstable condition of the start
carefully together with location of head pond.
of power generation operation.
Diameter and Thickness
In terms of the stability of operation, the case that
Diameter of penstock shall be selected economical penstock length is more than 500m shall be carefully
diameter. Thickness is also designed correctly.
Anchor block
examined
In terms of the project layout, length of penstock/head
The anchor block shall be prepared at bending portion and is checked and the value less than 3 is preferable.
at around 50-100 m interval. The anchor block shall be
Flow velocity (Diameter)
constructed on the sound rock. If not, the pile foundation Flow velocity of economical diameter is usually at around
shall be considered.
2-3m/s.
5.1.6 Powerhouse and Tailrace
Layout
Powerhouse shall be reinforced concrete structures. The
Layout of powerhouse is correctly arranged in relation elevation of erection bay and yard around powerhouse
with Penstock and Tailrace/River course. The Access shall be set higher than 100 years flood.
Road to transport the equipment is correctly designed.
Powerhouse shall have enough space to accommodate the
Type
Turbine and Generator, and finally, the design of the
Type of Powerhouse, in general, is selected an open air manufacturer shall be reflected.

type in mini hydropower project. The Powerhouse shall Access Road shall have slope of around 10% and enough
be
constructed
on
the
sound
rock.
Layout
of radius curvature.
Powerhouse/Tailrace shall be set not to enter sand and

gravel of the river to the tailrace.
Tailrace is constructed conjunction with powerhouse
usually and shall have enough capacity to flow out the
plant discharge in relation with water level of the river.
5.1.7 Main Transformer
/Switchyard
Main transformer yard/Switchyard shall be set at around These yards shall be designed easy for construction and
the powerhouse and same or higher elevation of maintenance.
powerhouse yard.
5.2
Hydro-mechanical Works
5.2.1 Gates, Hoists and Screen
Necessity and function of screen, gate and hoist at each Detail design will be made by the Contractor, design
condition of each gate and hoist shall be prepared clearly.
structure shall be studied carefully.

Basic dimension of each screen, gate and hoist shall be
decided taking civil structures into consideration.
Operation method as manual or mortar driven shall be
decided necessity of emergency operation.
5.2.2 Penstock
General layout study and design of civil works decide the Detail design will be made by the Contractor. The design
condition shall be prepared clearly.
penstock layout.
Diameter and thickness of penstock shall be designed
based on the plant discharge and internal water pressure
including of water hammer or minimum thickness for
transportation. For allowable stress of steel, the available
material in the country shall be considered.
5.3
Electro-mechanical Works
5.3.1 Hydraulic Turbine
Based on the decided effective head and plant discharge, Selection of type of turbine is correctly done subject to
reference. Francis type turbine with horizontal axis is
the type of turbine is selected.
widely selected for small hydropower projects. For the

project with high effective head, Pelton type turbine is
selected. For the project with low head, Kaplan type
turbine is applicable.
Consequently, rotational speed and turbine setting level
shall be decided.
5.3.2 Generator
Following the selected turbine, the type of generator shall Selection of type of generator shall be correctly done.
Flywheel effect (GD2), maximum speed rose and
be selected.
maximum pressure rise (water hammer) together with

closing time of turbine shall be studied and calculated.
5.4
Transmission Line
5.4.1 Present Conditions of
Transmission and distribution line system around the Verify the description of the information/data.
Transmission and
project is mentioned as diagram. If PLN has construction
Distribution Line
plan of new transmission and distribution line, the route

and capacity need to be confirmed.
5.4.2 Connection to Power Grid

System
Based on the above study, the connection point to PLN Connection point to PLN grid, size and length of
grid is decided. Length of transmission and distribution conductor shall be cleared.
line shall be minimized. Required capacity of conductor is Evaluation of transmission line:
studied for new or the existing transmission and The case that length of transmission line more than 20km
distribution line.
shall be carefully examined.
Power flow analysis shall be carried out in order to secure

the connection between the project and PLN grid.
6.0
INITIAL ENVIRONMENTAL EXAMINATION (IEE)
6.1
IEE
IEE shall include the following issues.
Verify the description of the information/data.
a. Laws and regulation
UKL and UPL shall be prepared separately and the
b. Land acquisition/use
developer needs to get approval from the local
c. Natural and Social Environment
government.
d. Environmental impacts at pre-construction, during

construction and operation stage
IEE is used for preparation of UKL and UPL.
6.2
Social Environment
Social environmental impact such as land acquisition and Verify the description of the information/data.
resettlement, if any, is studied carefully.
6.3
Natural Environment
Natural environmental impact such as special fauna and Verify the description of the information/data.
flora, if any, is studied carefully.
7.0
CONSTRUCTION METHOD AND SCHEDULE
7.1
Construction Materials
Type
Investigation results shall be mentioned.
Materials of sand and gravel for concrete aggregate and Source of construction materials and volume shall be
mentioned clearly.
masonry is important
Quantity
Required quantities based on the design shall be secured.
Location
As much as practicable, materials near by the project shall

be used. Investigation of construction materials shall be
done.
7.2
Construction Method
Method
Expected construction method, employed equipment and
Construction method of each structure shall be studied period of main structures shall be studied and mentioned
clearly.
and mentioned.
Equipment
Required equipment to achieve the method and period

shall be described.
Period
Required period based on method above for each structure

and total shall be described.
7.3
Construction Schedule
Construction schedule from mobilization to COD Construction period of small hydropower project is
expected to be around 24 months.
(Commercial Operation Date) is examined in detail.
In the schedule, sequence of various works as well as

interface
of
the
contract
lots
such
as
civil,
hydro-mechanical and electro-mechanical works shall be

considered.
8.0
CONSTRUCTION COST
8.1
Cost Estimate
8.1.1 Cost of Civil Works
Construction cost of civil works is estimated generally The related cost shall be appropriately estimated.
referring to the market price and/or contract unit price of
similar and/or neighboring projects. The work quantities
for cost estimate refer to the basic design.
8.1.2 Cost of Hydro-mechanical
Construction cost of hydro-mechanical works is estimated The related cost shall be appropriately estimated.
Works (Gates and
generally referring to the past/similar projects.
Penstock)
Quotation from manufacture is usable. The cost shall also

include design, fabrication, transportation, installation and
tests.
8.1.3 Cost of Electro-mechanical
Construction
cost
of
electro-mechanical
works
is Verify the description of the information/data.
Works (Generating
estimated generally referring to the past/similar project.
Equipment)
Quotation from manufacture is usable. The cost shall also

include design, fabrication, transportation, importation,
installation and tests.
Cost of transmission/distribution line shall also be
included.
8.1.4 In-direct Cost
Cost of in-direct cost including engineering, land Verify the description of the information/data.
acquisition,
administration,
general
expenses
and
contingency other than the above direct construction cost

is estimated.
8.1.5 Project Cost
Total project cost includes the above direct costs, in-direct Evaluation of cost:
cost and tax.
Unit construction cost is expected to be less than

2,500USD/kW for project feasibility.
Unit energy cost is expected to be less than 10US for
project feasibility.
It is noted that the cost less than 1,000USD/kW or
2.0 US/kWh seems to be not reliable in terms of quality.
9.0
FINANCIAL EVALUATION
Conditions for Financial
1)
Analysis
Inflation rate for CAPEX (Capital Expenditure) and Verify the description of the information/data.
OPEX (Operational Expenditure) and
2)
Revenue (Tariff, Energy)
3)
Initial construction cost
4)
Depreciation period of initial construction cost
5)
OPEX
6)
Corporate tax rate
7)
Source of the fund (Debt equity ratio)
8)
Bank loans: terms of conditions (IDC (Interest

During Interest), interest rate, maturity, grace period)
Financial Analysis
Financial Evaluation
10.0
CONCLUSION
1)
Cash flow projection
2)
Profit & loss statement
3)
Balance sheet
1)
Equity IRR (Internal Rate of Return)
2)
Project IRR
3)
NPV (Net Present Value)
4)
Financial sensitivity
Both of technical and financial feasibility of the project Verify the description of the information/data.
shall be concluded.
Attachment -1
Design Drawings
Check whether there is the required information/data.
Attachment -2
Investigation Data
- Topography
- Geology
- Hydrology
Attachment -3
Analysis and calculations

- Hydrological analysis
- Hydraulic calculation
- Structural calculation
- Cost estimation
- Financial analysis
Remarks)
For details of the colored evaluation, see the survey report.

Survey For Enhancement of Private Sector Investment On Small Hydro IPP Projects in Indonesia

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Survey For Enhancement of Private Sector Investment On Small Hydro IPP Projects in Indonesia

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Survey

KRI INTERNATIONAL CORPORATION

KRI INTERNATIONAL CORPORATION

Background of the Survey .........................................................................................................1

Power Supply and Demand, Development of Power Generation Facilities and

Chapter 3 Parties Concerned with Small Hydro IPP Projects............................................................. 23

Chapter 4 Selection and Identification of Small Hydropower Projects to be Promoted ..................... 25

Chapter 5 Financing Structure for JICA-PSIF .................................................................................... 27

Credit Overview for Small Hydropower Independent Power Producers (IPPs) in

Chapter 6 Preliminary Action Plan ..................................................................................................... 34

BKPM One Stop Service Related to Power Generation Business ................................. 17

Environmental Impact Analysis

Background and Objectives of the Survey

Background of the Survey

Outline and Scope of the Survey

Chapter 2 Status of Small Hydropower Sector and Related Legal

Power Supply and Demand, Development of Power Generation Facilities

2.1.1 Electric Power Supply and Demand

Installed Capacity (2013)

Maluku, Papua &

Power Generation (2013)

Maluku, Papua &

Maluku, Papua &

Capacity Factor and Load Factor (2013)

2.1.2 Development of Power Generation Facilities

(Source: PLN Statistics 2013)

Table 2.1.5 Power Development Plan (RUPTL 2013-2022)

Table 2.1.6 Outline of Crash Programs

35 GW Power Development Plan (2015-2019)

Table 2.1.7 (2)

35 GW Power Development Plan (2015-2019) in Each Region

35 GW Power Development Plan (2015-2019) in Each Source

2.1.3 Hydropower Potential

Development Plan of Renewable Energy1

(Source: RUPTL 2013-2022)

Number Capacity (kW)

Overview of Policies and Institutions of the Indonesian Government

2.2.1 Policy and Institutions on Electric Power Development

less than 25% by 2015 and less than 20% by 2050.

2.2.2 Electric Power Development System

2.2.3 Power Development Plan

Support MP3EI (2011-2025 in the Indonesian accelerated and enlarged economic

Avoidance of lack of power supply;

Sufficient energy reserves;

Competitive electricity tariff structure.

Diversification of power source

Enhancement in the use of new and renewable energy;

2.2.4 Electricity Tariff

Table 2.1.11 Historical Revision of Electricity Tariff

Usage Tariff (Rp./kWh)

Block III : > 60 kWh

Block III : > 60 kWh

S-2/TR 3,500 VA-200 kVA

less than 450 VA

Block III : > 60 kWh

Block III : > 60 kWh

R-2/TR 3,500 VA-5,500 VA

Block II : > 30 kWh

Block I : 0 - 108 kWh

Block II : > 108 kWh

Usage Tariff (Rp./kWh)

Block II : > 30 kWh

3,500 VA-14 kVA