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Infrastructure & PPPs in Indonesia - Q3 2024 Update

Writer's picture: YOG INFRAYOG INFRA

YOG INFRA Q3 2024 insight series

INDONESIA saw a very significant increase in proejcct development activities in the last quarter across varied infrastructure sectors. Among clean energy transition, we see new developments in areas of solar, wind, geothermal as well as related developments for establishment of clean energy hubs. A number of projects are supported by G2G collaborations and TA programs from DFIs such as USAID, ADB etc. We also see a number of projects being developed in transport & logistics sector, WASH (water and waste management), telecom and urban infra via PPP modality and private sector participation.

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

 

JULY 2024

JICA TO ENHANCE WASTE MANAGEMENT IN WEST JAVA

The Government of Japan has announced plans to enhance waste management in West Java in Indonesia through a technical cooperation project with the Japan International Cooperation Agency (JICA).  The agreement aims to develop the TPPAS Regional Legok Nangka project.

PT JES, a consortium of Sumitomo Corporation, Hitachi Zosen, and Energia Prima Nusantara, will construct and manage the waste processing site, adhering to the specified standards. The project, expected to start operations in February 2029, involves a 20-year concession period with provisions for tipping fees and the sale of electricity generated by the facility. The investment for the project is approximately IDR 4 Trn (USD 2.52 Bn), with the central government contributing IDR 1.3 Trn (USD 0.89 Bn) through a Viability Gap Fund from the Ministry of Finance.

This project, part of the Asia Zero Emission Community (AZEC) initiative, is one of three key projects supported by Japan, which also includes the Bekapur waste management project covering Bekasi, Karawang, and Purwakarta.


PT PLN AND USAID TO ACCELERATE RENEWABLE ENERGY TRANSITION IN INDONESIA

PT PLN (Persero) has collaborated with the United States Agency for International Development (USAID) to accelerate Indonesia’s energy transition through renewable energy (RE) and electricity modernisation initiatives.

The six key objectives for the USAID-PLN collaboration are:

  1. Supporting energy transition programs and roadmaps,

  2. Accelerating renewable energy system implementation,

  3. Enhancing organizational structures,

  4. Modernizing operational procedures,

  5. Fostering cooperation with the Ministry of Energy and Mineral Resources, and

  6. Promoting gender equality and social inclusion programs.

 

PERTAMINA NRE TO EXPAND ITS CLEAN ENERGY PORTFOLIO TO 6 GW IN INDONESIA

Pertamina NRE has announced plans to expand its clean energy portfolio to 6 GW of installed capacity by 2029 in Indonesia. Pertamina NRE plans to achieve this through developments in gas-to-power, geothermal, solar power, and biogas projects. As of mid-2024, the company has installed about 2.6 GW of power generation capacity across various platforms.

Pertamina NRE also targets to sell 19.2 Mn tons of CO2 equivalent in carbon credits by 2029. Moreover, the company aims to produce 7,000 tons of clean hydrogen annually, 840 thousand kl of bioethanol, and contribute 51.4 GWh to the battery and electric vehicle ecosystem by 2029. The company has allocated an investment budget of USD 6.2 Bn.


TRANS PAPUA TOLL ROAD PPP PROJECT

The Government of Indonesia has secured a USD 202 Mn Public-Private Partnership (PPP) to develop a 50 km section of the Trans Papua Toll Road which is a part of the Mamberamo–Elelim stretch. This project awarded by the Ministry of Public Works and Public Housing, aims to enhance transportation infrastructure in the regions of Papua and Papua Pegunungan.

The PPP arrangement includes construction of the toll road segment and its operation and maintenance for 13 years. Additional components of the project involve the maintenance of slopes and cuttings, bridge construction, and the installation of vehicle weighing systems. The project is backed by Penjaminan Infrastruktur Indonesia (PII), ensuring financial guarantees for the initiative.


INDONESIA TO RE-TENDER 96KM BALI TOLL ROAD

Indonesia's Ministry of Public Works and Housing will re-tender the concession to develop the IDR 24.6 Trn (USD 1.51 Bn), 95.9 km Mengwi-Gilimanuk toll road on the resort island of Bali in Q3 2024.

The government is considering providing financing support to the project to make it more financially viable. The central and the regional governments are allowed to provide financing to certain infrastructure projects. The Finance Ministry can also provide repayment guarantee to debts incurred to fund certain infrastructure projects. The Mengwi-Gilimanuk project failed to get financing likely because of the huge size of the investment needed as the land price in Bali is notoriously expensive. Financing support from the governments could make the project more commercially attractive.

The toll project, which will connect the western part of Bali with the central part of the island, is a “national strategic project” as it will help ease the traffic congestion along the route used by truckers to transport goods from Java to Bali and Lombok islands. This toll road, the government also plans to develop a 6.04km underground light rail transit system connecting the international airport on the island with the Kuta area, the island’s most famous tourist district. This project is estimated to cost around IDR 14.2 Trn (USD 922.20 Mn).


METRO PACIFIC AND GIC TO BUY INTO INDONESIA TOLL ROAD

Metro Pacific Toll ways Indonesia Services and Margautama Nusantara, both of which are owned by Metro Pacific Investment Corporation (MPIC), will partner with a GIC-backed investment firm to buy into a toll road project in Indonesia. The MPIC-backed companies and Warrington Investment have signed agreements to a combined 35% in Jasamarga Transjawa Tol, the owner of the 676 km Transjawa toll road concession.

The investors 29.4% from existing shareholders Jasa Marga (Persero) and Koperasi Konsumen Karyawan Jalin Margasejahtera (KKJM), as well as bought new shares issued by the toll road operator. The Philippines-based companies will own a combined 24.5% in the toll road in exchange for IDR 11 Trn (USD 714.23 Mn), while GIC-backed Warrington Investment will hold 10.5% for a payment of IDR 4.71 Trn (USD 305.17 Mn).

The deal is in line with First Pacific’s efforts to grow its infrastructure portfolio, focusing on mature toll roads. The company, which holds 46.3% of property-to-energy conglomerate MPIC, now owns 17 toll roads totalling 454km, out of which six are in Indonesia. The payments to the Jasamarga Transjawa Tol are scheduled to be settled by the end of 2024.


INDONESIA TO RE-TENDER KOMODO AIRPORT PROJECT IN 2024

The Indonesian Transportation Ministry will re-tender the right to develop and operate the Komodo Airport in Q4 2024 after Cinta Airport Flores (CAF), a consortium formed by Cardig Aero Services and Singapore-based Changi Airports International, returned its 25-year concession over the project to the government. In December 2022, CAF returned the concession to the ministry after finding that the project financial projections set before the COVID-19 pandemic were no longer valid.

CAF was awarded the concession in December 2019 and initially planned to invest IDR 1.3Trn (USD 87.8Mn) in the project. This involves the expansion of the runway by more than three times from the current 2,250 sqm to 7,500 sqm. The project got delayed as CAF tried to renegotiate the concession terms and conditions with the government after tourism in Indonesia was hit by the pandemic.

That Indonesian state-owned airport operator Angkasa Pura I (AP I) has expressed its interest in the airport project, and it was in talks with Astra Group's infrastructure subsidiary Astra Infra so they can jointly take over the management of the airport from CAF. Tourist arrivals in Labuan Bajo reached around 43,000 people in May, rising from 39,600 during the same month in 2023.

Meanwhile, the transport ministry is also preparing to offer the development of the Bintan Airport to investors under Public-Private Partnership (PPP) arrangement. The project is estimated to cost IDR 11.18Trn (USD 755.26Mn) and would involve the development of an aerospace industrial park northwest of the runway.


AUGUST 2024

INDONESIAN DEVELOPER SOUNDS OUT JAPANESE INVESTORS FOR HYDROPOWER

Kayan Hydro Energy (KHE) has met with several Japanese companies as it seeks investors to co-develop a hydropower project in Indonesia’s East Kalimantan province after Sumitomo Corporation pulled out. The development of Kayan 1 will require an estimated USD 17.8 Bn, including supporting infrastructure such as transmission lines and a 9 GW substation.

While KHE is scouting for potential Japanese investors, it should retain control citing Edi Prio Pambudi, deputy coordinating minister for international economic cooperation at Indonesia’s Coordinating Ministry. The Kayan River affects livelihoods, the Indonesian government is not keen for its management to be controlled by foreign entities.


NEC TO SUPPLY COMMUNICATIONS SYSTEM FOR JAKARTA MRT PHASE 2

Nippon Electric Company Corporation (NEC) has secured a contract from Larsen & Toubro Limited and Japan-based Sojitz Corporation to develop a communications system and a Facility Supervisory Control and Data Acquisition System for the Jakarta Mass Rapid Transit (MRT) North-South Line Extension Project Phase 2. This project is financially supported by the Government of Japan via a development assistance loan from the Japan International Cooperation Agency (JICA).

Phase 2 of the North-South Line Extension Project extends the existing 16-km-long line, running from Lebak Bulus Grab Station to Bundaran HI Station, by approximately 6 km to Kota Station. The total line length will reach around 22 km, with an estimated travel time of 45 minutes from Lebak Bulus Grab Station to Kota Station. The extension is scheduled to be fully operational by 2030.


TRIAL COMMENCES ON THE ART SYSTEM IN INDONESIA

The Nusantara Capital Authority (IKN), in partnership with PT Kereta Api Indonesia (Persero) and PT Industri Kereta Api, has commenced driverless train testing for the Autonomous Rail Rapid Transit (ART) system in Indonesia. The system is made in China, is a hybrid of a bus, train, and tram and has started its first road tests in the city.

This electric is made by China Railway Rolling Stock Cooperation Qingdao Sifang Company travels at 40 km/hr and can carry about 200 passengers. It uses sensors to read road dimensions, making it a versatile addition to the city’s transport network. The proof of concept (PoC) involves testing two train sets, with one already in Nusantara and the other in transit.

The autonomous rail transit is indeed cheaper because it is without rails, using magnets. The Per unit for three carriages, the price is approximately IDR 74 Bn (USD 4.7 Mn). 


PLN TO ADVANCE GREEN ENERGY INITIATIVES AND EV INFRASTRUCTURE IN INDONESIA

PT PLN (Persero) has signed a memorandum of understanding (MoU) with PT CT Corpora (CT Corp) to advance green energy initiatives and enhance electric vehicle (EV) infras       tructure across Indonesia. It will involve the development of EV infrastructure and the provision of clean energy services through renewable energy certificates (REC). 

The partnership with PLN will further support these efforts by facilitating the installation of EV charging stations across CT Corp’s outlets nationwide. PLN Icon Plus, a subsidiary of PT PLN will collaborate with CT Corp on developing streaming content, telecommunications, and multimedia networks.


TELKOMSEL TO SUPPORT NUSANTARA WITH 4G AND 5G NETWORK INFRASTRUCTURE

Telkomsel has announced plans to support Indonesia’s new capital city, Nusantara (IKN), with extensive network infrastructure.  The company has set up 49 base stations to deliver both 4G and 5G services in Nusantara and its surrounding areas. 

Telkomsel is also enhancing network connectivity in nearby cities, Balikpapan and Samarinda, ensuring robust coverage in key locations like airports and shopping centers. Telkomsel’s efforts align with its goal to help Nusantara become a smart, sustainable city. The company is also establishing customer service centres, including at Balikpapan’s airport.


MOC SIGNED TO STRENGTHEN COOPERATION IN THE ENERGY SECTOR IN INDONESIA AND JAPAN

The Governments of Indonesia and Japan have signed a memorandum of coordination (MoC) to strengthen cooperation in the energy sector.  The agreement was signed by the Ministry of Energy and Mineral Resources (ESDM) of Indonesia and the Ministry of Economy, Trade and Industry (METI) of Japan. 

The MoC aims to enhance collaboration on energy transition, renewable energy (RE) technologies, energy efficiency, and projects like hydrogen and ammonia development, carbon recycling, and carbon capture and storage (CCS/CCUS). 

The partnership also focuses on improving energy security and promoting joint projects, investment, and technology exchange between the two nations. An Energy Forum will be established to facilitate discussions and report on the progress of the MoC to ministerial-level meetings.


TERRA CHARGE TO DEPLOY 1,000 PUBLIC EV CHARGING STATIONS IN INDONESIA BY 2025

Japan-based Terra Charge has announced plans to establish 1,000 public electric vehicle (EV) charging stations across Indonesia by the Q4 of 2025. This initiative is part of Indonesia’s broader push towards sustainable transportation, aligning with the country’s goals of reaching 2.5 Mn EV users by 2030 and achieving net-zero emissions (NZE) by 2050.

Terra Charge has already installed 100 charging stations in major cities like Jakarta, Bandung, Surabaya, and Bali within eight months. The expansion will focus on four key provinces: Jakarta, West Java, East Java, and Bali. The company aims to support Indonesia’s sustainability targets by promoting clean energy and reducing air pollution by 29% by 2030.


ACEN AND BARITO RENEWABLES TO ACCELERATE WIND ENERGY DEVELOPMENT IN INDONESIA

ACEN Indonesia Investment Holdings Private Limited, a subsidiary of Philippines-based ACEN Corporation has partnered with Barito Renewables, a subsidiary of PT Barito Wind Energy to accelerate wind energy development in Indonesia. 

This collaboration aims to enhance Indonesia’s renewable energy capacity. The partnership builds on the acquisition of three wind projects in South Sulawesi, Sukabumi, and Lombok, totalling 320 MW, and includes battery storage to improve grid stability.

This exclusive partnership with Barito Renewables represents a bold step forward in our commitment to advancing Indonesia’s renewable energy sector. It not only aligns with ACEN’s growth strategy in the region but also exemplifies our dedication to fostering innovative and sustainable energy solutions.


PARTNERS TO DEVELOP 2 GW CLEAN ENERGY HUB IN INDONESIA

Indonesia-based PT Calypte Sugi Power has partnered with Singapore-based Aslan Energy Capital as a development partner for a project to build a clean energy hub with a solar power production capacity of 2 GW in Indonesia. The two companies have signed a memorandum of understanding (MoU) to cooperate on the development of the Sugi Power Hub, which is planned to be located on Sugi Island.

The 2 partners plan to initially develop 1 GW of solar power production capacity by Q3 2026, with definitive plans to achieve up to a combined 2 GW of solar capacity by Q4 2027.  Feasibility studies have already been completed and work on the proposed complex is underway. Detailed project engineering is set to start in 2024, while the final investment decision (FID) is targeted during Q2 2025.

The Sugi Power Hub is a key component in our group's strategic mission on developing a sustainable energy value chain portfolio. The unique geographic location, relatively flat terrain and good solar irradiance conditions of the Sugi Island makes a compelling case to establish the power arm of our value chain and accelerate the progress in achieving the ESG goals and SDG targets of the Riau Province as well as Indonesia's overall ambition to be a green energy leader in SE Asia.


SEPTEMBER 2024

TELIN AND PARTNER TO DEVELOP ICE SYSTEM 2 IN INDONESIA

PT Telekomunikasi Indonesia International (Telin) and Indosat Ooredoo Hutchison (IOH) have partnered to develop the Indonesia Cable Express System 2 (ICE System 2). The ICE System 2 is designed to meet the growing demand for high-quality and efficient connectivity, further supporting Indonesia’s digital economy by providing reliable services for businesses and consumers. 

This collaboration was formalised through a memorandum of understanding (MoU), which aims to enhance Indonesia’s telecommunications infrastructure by improving connectivity across key regions, including Jakarta, Surabaya, Balikpapan, Makassar, and Manado, with additional links to Singapore. The agreement sets the stage for further negotiations to finalise the project’s technical and operational details.


LARGEST GROUND-MOUNTED SOLAR POWER PLANT LAUNCHED IN WEST JAVA

The Government of Indonesia has launched its largest ground-mounted solar power plant in Purwakarta, West Java. The 100 MWp facility, developed by PT Aruna Hijau Power, features 160,000 solar panels using advanced bifacial technology, which increases efficiency by capturing sunlight on both sides of the panels. 

Spanning over 80 hectares across five locations, the plant is expected to generate 150 GWh of energy annually, reducing carbon emissions (CO2) by around 118,725 tons. This solar power plant is a collaborative effort involving several stakeholders, including PT PLN (Persero), and is a significant step towards Indonesia’s goal of achieving net-zero emissions.


THE GOVERNMENT OF INDONESIA OUTLINES STRATEGIES TO ENHANCE TRANSPORTATION SYSTEM

The Government of Indonesia has outlined three strategies to enhance the transportation system. The government will play a key role in accelerating public transportation development, making it efficient, equitable, and sustainable.

The government is exploring creative financing and private sector participation in transportation infrastructure projects. Finally, the government will focus on the importance of collaboration between central and local governments and other stakeholders to improve connectivity across Indonesia. The goal is to create an affordable, efficient, and environmentally friendly transportation system.


MEMR TO LAUNCH TENDERS FOR 400 MW OF GEOTHERMAL PROJECTS IN INDONESIA

The Ministry of Energy and Mineral Resources (MEMR) of Indonesia has announced plans to tender five geothermal sites in 2025 to boost private sector investment in the geothermal energy sector. The sites include three classified as Preliminary Survey and Exploration Areas (WPSPE) and two as Geothermal Working Areas (WKP).

The WPSPE sites are Gunung Lawu (195 MW), Sipoholon Ria-ria (35 MW), and Cubadak-Panti (30 MW). The WKP sites are Telaga Ranu (85 MW) and Wapsalit (46 MW). With Indonesia’s 23.6 GW geothermal potential, this initiative aims to expand the country’s renewable energy (RE) capacity.


MCC LAUNCHES THE USD 650 MN INDONESIA INFRASTRUCTURE AND FINANCE COMPACT

The Millennium Challenge Corporation (MCC) and the Government of Indonesia have launched a USD 649 Mn Indonesia Infrastructure and Finance Compact. The five-year grant aims to improve infrastructure and expand access to finance for small and medium enterprises, particularly women-owned businesses. The compact is led by the Millennium Challenge Account – Indonesia II (MCA-Indonesia II).

With an additional USD 49 Mn from Indonesia, the compact will focus on infrastructure investments in South Sumatra, North Sulawesi, Riau, Riau Islands, and Bali. The program will also provide technical assistance to women entrepreneurs, enhancing business and financial skills. This compact is in line with MCC’s long-standing partnership with Indonesia, which began in 2006. 

The threshold program implemented a national immunization strategy, built the capacity of health care workers, and supported government transparency initiatives. This was followed by the previous USD 474 Mn MCC-Indonesia Compact that concluded in 2018, focusing on public procurement, clean energy, and community health and nutrition.


PAL INDONESIA COMPLETES ITS SECOND 60 MW BARGE-MOUNTED POWER PLANT

PAL Indonesia has completed its second 60 MW barge-mounted power plant (BMPP) to serve the growing electricity needs of eastern Indonesia. The BMPP, commissioned by Indonesia Power, provides a flexible and efficient solution for regions lacking access to traditional power grids. 

Further, the technological advancements and environmental benefits of this new BMPP build on the success of the first unit of the plant. Before its handover, the BMPP Nusantara-2 underwent testing, ensuring safety, efficiency, and environmental sustainability. This project showcases the country’s capability to develop sophisticated energy infrastructure while aiming to contribute further to clean energy initiatives.


INA AND ALLIANZGI TO INVEST IN INFRASTRUCTURE AND ENERGY TRANSITION PROJECTS IN INDONESIA

Indonesia Investment Authority (INA) has partnered with Allianz Global Investors (AllianzGI) to co-invest in infrastructure and energy transition projects. The collaboration aims to promote Indonesia’s economic development by providing up to USD 200 Mn annually in customised credit solutions. These investments will focus on sustainable projects that align with Indonesia’s growth, offering non-traditional financing options beyond typical bank loans and equity. 

By leveraging this investment framework, both parties aim to co-invest jointly in sectors that are aligned with Indonesia’s strategic development, ensuring that investments are managed responsibly based on appropriate terms and structure to achieve optimal risk-adjusted returns for both parties.


SAMAIDEN GROUP JV TO EXPAND ITS RENEWABLE ENERGY PORTFOLIO IN INDONESIA

Samaiden Group hd has formed a joint venture (JV) with PT MCS Bina Energi to expand its renewable energy (RE) portfolio in Indonesia. 

The venture, made through Samaiden SG Private Limited, a subsidiary of Samaiden Group will focus on solar photovoltaic (PV) systems, power plants, and build-own-operate-transfer (BOOT) projects. Samaiden holds a 70% stake, meanwhile MCS holds 30 %, with Samaiden providing technical expertise and MCS leveraging its local business and regulatory knowledge. This joint venture aligns with Indonesia’s commitment to RE and strengthens Samaiden’s expansion in Southeast Asia (SEA).

 

List of key transactions - Indonesia Q3 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.

For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com


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