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Infrastructure & PPPs in Indonesia - Q2 2024 Update

YOG INFRA Q2 2024 insight series

INDONESIA is seeing development of alternative energy generation sources, with investments from international developers. The offtake for upcoming renewable energy plants is also targetted for power export to nieghbouring countries (e.g., Singapore). The country has alos annouced plans to test use of hydrogen as a transportation fuel and run pilots for commercial use/ heavy trucks. The transport and logistics sector has also seen development of new projects by government agencies as well as via PPP route.

Read more about key developments in Infrastructure and PPPs in Indonesia in our latest insight.

 

April 2024

CHANDRA ASRI GROUP, PERUM JASA TIRTA II SIGN MOU ON NEW RENEWABLE ENERGY AT CA-EDC PLANT

PT Chandra Asri Pacific Tbk (Chandra Asri Group) inked a memorandum of understanding (MoU) with state-owned water firm Perum Jasa Tirta II (PJT II) for a partnership related to green energy. Under this MoU, both parties agree to conduct a feasibility study on green energy potential through the development of solar power plants and hydropower plants. These plants will go into powering Chandra Asri Group’s chlor-alkali and ethylene dichloride (CA-EDC) which is currently under construction. This plant requires 340 MW of electricity. The study also seeks to promote the use of new renewable energy and support Indonesia’s goal of reaching net zero emissions by 2060.

PJT II is responsible for providing water for communities and industries in West Java and Jakarta. The company also manages the Jatiluhur Dam in Purwakarta and the Karian Dam in Lebak, Banten. In addition to power plants, this study will also explore the potential development of clean water supply systems in collaboration with Chandra Asri Group.


CHN ENERGY WINS 100 MW INDONESIAN SOLAR

A subsidiary of China Energy Investment Group (CHN Energy) has won the right to develop a 100 MW floating solar power project in Indonesia. PT PLN Nusantara Power, which is owned by Indonesian state utility Perusahaan Listrik Negara (PLN) awarded the project to Guodian Power Development Company (GD Power). It will be CHN Energy's first solar investment in Indonesia.  

The 100 MW floating solar plant will be located at the Karangkates Dam of Malang regency, East Java. It is designed to become the second largest utility-scale solar plant in Indonesia with a target commissioning date of 2026.  The successful bid for the Calangcades floating 100MW photovoltaic power station project signifies the CHN Energy's significant penetration into the Indonesian market, expanding its energy portfolio from traditional thermal power investments to photovoltaic ventures.


JAKARTA MRT NETWORK TO BE EXPANDED TO JAVA, BANTEN

The Government of Indonesia has announced plans to expand its MRT network beyond Jakarta in Q3 2024, connecting the capital city to Banten and West Java. The project is estimated to cost IDR165 Trn (USD 13.8 Bn) and aims to ease traffic congestion in Jakarta, benefiting over 11 million residents and millions of daily commuters. The expansion aligns with the country’s infrastructure modernisation efforts, including the ongoing development of high-speed rail (HSR) and light rail transit (LRT) networks. 

Moreover, the funding for the initial 24.5km line of the East-West Line, which will have 21 stations, has been secured from the Japan International Cooperation Agency (JICA) and the Asian Development Bank (ADB). JICA will fund the construction of underground tracks, operational facilities and rolling stock, meanwhile, ADB will fund the development of elevated tracks.


May 2024

MASDAR TO DEVELOP RENEWABLE ENERGY PROJECTS IN INDONESIA

Masdar has signed a memorandum of understanding (MoU) with Pertamina Power Indonesia, focusing on the development of solar, wind, and green hydrogen projects in the country. Additionally, Masdar signed a joint development study agreement (JDSA) with PLN Nusantara Power to expand the Cirata Floating Solar PV project, aiming to triple its capacity to 500 MW from the initial 145 MW phase launched in 2023.

These new initiatives also include the development of up to 2 GW of renewable energy (RE) in Nusantara, starting with an initial phase of 200 MW. This development aligns with the country’s commitment to making Nusantara a model eco-city powered by clean energy. Moreover, Masdar’s ongoing projects in Indonesia, include the Cirata Floating Solar PV plant—the largest floating solar facility in the region.


PLANS ANNOUNCED TO EXPAND JAKARTA’S TANAH ABANG STATION

The Ministry of Transportation (MoT) of Indonesia, the Jakarta Provincial Government, and PT KAI have announced plans to expand Tanah Abang train Station to enhance passenger services in Indonesia. The project will add two railway tracks, increase platforms, and develop intermodal integration facilities. The new station will be able to accommodate 300,000 passengers, three times more than its current capacity. 

The MoT will oversee the new station building and tracks, while the provincial government of Jakarta focuses on road widening and intermodal facilities, and PT KAI manages parking and operational improvements. The expanded station will cover 12,000 square meters, featuring commercial areas and facilities for persons with disabilities.

The project encompasses the development of a new station building, the increase of railway tracks from four to six, the increase of platforms from two to four, and the arrangement of intermodal integration facilities. The addition of two railway tracks at the station will cut the headway in the Serpong line, from seven minutes to three minutes.  The expansion project is also expected to enable the train station to accommodate passengers three times higher, from 100 thousand to 300 thousand on a daily basis.

While PT KAI is in charge of parking and operational enhancements, the Jakarta provincial government is concentrated on road widening and intermodal facilities, and the Ministry of Transportation will oversee the new station building and tracks. The 12,000 square meter upgraded station will have amenities for those with disabilities as well as commercial space.


US-BASED FIRM TO DEVELOP LARGE SCALE COMPLEX FOR SOLAR EQUIPMENT IN INDONESIA

United States-based SEG Solar has signed a land utilisation agreement with Kawasan Industri Terpadu Batang to develop a multi-gigawatt-scale manufacturing complex for solar equipment in Indonesia. The deal will facilitate the construction of a USD 500 Mn industrial photovoltaic (PV) production complex. The firm plans to create a site with the capacity to make 5 GW of silicon wafers, 5 GW of solar cells and 5 GW of modules.

The PV industrial complex will be located in the Batang Regency of Central Java province and will be the largest one of its kind in Southeast Asia. It will cover a total area of 40 hectares. In the first phase, SEG Solar will install manufacturing facilities with an annual output of 5 GW for solar cells and 3 GW for modules. They are expected to begin operations in Q2 2025

 

PLANS ANNOUNCED TO CONDUCT HYDROGEN TRIALS FOR TRANSPORT IN INDONESIA

The Ministry of Energy and Mineral Resources (Kementerian ESDM) plans to trial the use of hydrogen as a transportation fuel, focusing on trucks, buses, and heavy vehicles in Indonesia. The initiative aims to explore environmentally friendly transportation options for the future, alongside biofuel and electric vehicles. 

Despite challenges in electric vehicle adoption, including the availability of affordable models and charging infrastructure, the government sees potential in hydrogen-powered vehicles to contribute to sustainable transportation. The pilot project is part of the country’s efforts to advance its energy transition and promote cleaner transportation technologies.


June 2024

PLN LAUNCHES TANAMALALA SOLAR POWER PLANT ON BEMBE ISLAND, INDONESIA

PT PLN (Persero) inaugurated the Tanamalala Solar Power Plant (PLTS) on Bembe Island, Selayar Regency, South Sulawesi Province. With a capacity of 176-kilowatt peak (kWp), this initiative marks a significant milestone in providing sustainable electricity to the community while reducing carbon emissions by 715 tons annually. The presence of the PLTS is set to revolutionize daily life on Bembe Island, enhancing economic activities and raising living standards. Previously reliant on a Diesel Power Plant (PLTD), residents now benefit from 24-hour electricity, significantly reducing costs and improving accessibility.

The Tanamalala PLTS has elevated the share of New Renewable Energy (EBT) in the Southern Sulawesi Electricity System (Sulbagsel) to 45.78%, marking a significant stride towards sustainable energy development in Indonesia. This project not only exemplifies PLN’s commitment to green energy but also promises lasting benefits for the community of Bembe Island, paving the way for a brighter and more sustainable future.


PLANS ANNOUNCED A NEW SUBSEA CABLE SYSTEM CONNECTING SINGAPORE AND INDONESIA

Singtel has signed a memorandum of understanding (MoU) with PT Telekomunikasi Indonesia International (Telin) to develop a new subsea cable system, INSICA (Indonesia Singapore Cable System), connecting Singapore and Batam, Indonesia. 

The two companies outline the construction of the 100 km submarine cable, which is scheduled to go live in Q4 2026. The cable will feature 24 fibre pairs and two diverse terrestrial cable paths, with each fibre pair offering a maximum capacity of up to 20 terabits per second. This will deliver exceptional bandwidth, seamless connectivity and robust network security and enable efficient resource sharing and scalability. The new diverse linked provided by INSICA will enhance network protection and reliability, ensuring uninterrupted 24/7 operations for data centers.

The direct connectivity between data centers will also support the deployment of emerging technologies, such as the Internet of Things, robotics, AI and data analytics, all of which require high bandwidth and low latency for commercial -scale and real – time applications. Southeast Asia's data center sector is experiencing rapid growth, driven by advances in AI, cloud computing, e-commerce, edge computing and 5G. This growth is attracting a wave of investment from both established players and new entrants.


INDONESIA’S SOLAR PV CAPACITY TO BE BOOSTED BY 6 GW TILL 2028

The Government of Indonesia has announced plans to increase its rooftop solar photovoltaic (PV) capacity, targeting an additional 5.75 GW between 2024 and 2028. This plan involves setting annual quotas for the PLN, aiming to steadily boost solar capacity over the next five years.

According to the Institute for Essential Services Reform (IESR), the breakdown of these quotas includes 901 MW in 2024, 1,004 MW in 2025, 1,065 MW in 2026, 1,183 MW in 2027 and 1,593 MW in 2028. Despite these ambitious plans, the new quotas fall short of the National Strategic Program’s target, which aims to achieve 3.6 GW of rooftop solar capacity by 2025. This target, set in 2021, underscores the government’s commitment to increasing renewable energy’s share in the national electricity mix. Additionally, Indonesia’s national electricity plan targets a 23 per cent share of renewables by 2025, up from 14 per cent in 2021.


SEMBCORP TO DEVELOP A 50 MW SOLAR POWER FACILITY, 14 MWH BESS IN INDONESIA

Sembcorp Industries (Sembcorp) has announced a joint venture (JV) with PT PLN Nusantara Renewables to develop a 50 MW solar power facility and a 14 MWh battery energy storage system (BESS) in Nusantara, Indonesia. The project, with Sembcorp Renewables Indonesia holding 49 % and PT PLN Nusantara Renewables holding 51 %, aims to supply power to PT PLN (Persero) under a 25-year power purchase agreement (PPA). It is projected to generate 93 GWh of clean energy annually, reducing over 100,000 tonnes of carbon emissions annually.

This initiative marks Sembcorp’s entry into utility-scale solar development in Indonesia, leveraging the country’s renewable energy (RE) potential. It expands on the joint development study agreement (JDSA) with Persero signed in October 2023, focusing on green hydrogen export from Indonesia to Singapore.


CONSTRUCTION SET TO START ON A 245-KM-LONG GAS PIPELINE IN INDONESIA

The Government of Indonesia has announced plans to commence the construction of a 245-km-long gas pipeline in Java in July 2024 to connect excess gas supply. The project is set to be completed in 17 months by December 2025. This new pipeline extends the initial 60 km phase, facilitating the transport of gas from producers in Eastern Java to industrial hubs in the west.

The pipeline addresses the issue of excess gas output in eastern Java, which is expected to continue until at least 2035 due to saturated demand, according to Indonesia’s upstream oil and gas regulator SKK Migas. In 2024, the eastern part of Java is projected to have a gas surplus averaging 90 Mn standard cubic feet per day (MMSCFD), meanwhile the western part will face a deficit of around 144 MMSCFD.


TRIALS PLANNED FOR INDONESIA’S FIRST COMMERCIAL NUCLEAR POWER PLANT

The National Research and Innovation Agency (BRIN) has announced plans to commence testing and operations of Indonesia’s first commercial nuclear power plant between 2030 and 2034. This initiative aligns with Indonesia’s strategy to incorporate nuclear energy into its renewable energy (RE) mix to achieve net zero emissions by 2060.

Currently, the BRIN is working on the development of a small modular reactor called the 40 MW PeLUIt-40. The PeLUIt-40, a gas-cooled, ultra-high-temperature reactor, aims to produce 250 MW of power by 2032. To implement these plans, Indonesia will employ two strategies. The first involves collaborating with international vendors to implement small modular reactor technology. Some vendors have already started technical and economic studies and opened offices in Indonesia to facilitate this process.

Meanwhile, the second strategy focuses on fostering national technology development through strategic international cooperation. This includes co-developing and implementing technologies like the PeLUIt-40 within the country.


 

List of key transactions - Indonesia Q2 2024


Source: YOG INFRA, Public Information

 

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YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle.

With our offices in Singapore, India and UAE, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.

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