Indonesia’s power sector hampered by enforcement

Author: Brian Yap | Published: 21 Jun 2016

Negotiating terms for power plant projects with state-run power operators in Indonesia remains a difficult task for foreign investors.

Since last September, the Widodo administration has introduced 10 economic stimulus plans followed by the implementation of the country’s amended negative list on foreign direct investment in May.  

But speakers at IFLR’s Southeast Asia Forum earlier this month argued that the power sector, which is now allowed to have a maximum foreign ownership of 67% under the new list, will continue to be plagued by implementation issues. 

Paiton power station, Indonesia"The amended negative list further opens the power sector, but implementation may be a problem in that negotiating a power offtake agreement with (state-owned power firm) PLN (Perusahaan Listrik Negara) is a major exercise," said Nicholas Serwer, general...