YOG INFRA Q4 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, government has annouced a 15-year plan to add 75 gigawatts (GW) of renewable energy (RE), focusing on solar, hydro, geothermal, and nuclear sources. A number of projects are supported by G2G collaborations and TA programs; and we also see increased investments from large pension funds in brownfield/ operational assets in the country. The wide range of developments presents a need for large-scale and low-cost financing in the country.
Read more about key developments in infrastructure and PPPs in Indonesia in our latest insight.
OCTOBER 2024
STAR ENERGY PLANS 103 MW CAPACITY EXPANSION IN INDONESIA
Star Energy Geothermal (SEG) has announced plans to expand its installed geothermal power generation capacity in Indonesia by 102.6 MW through retrofitting existing assets and enhancing capacity in its operating fields. The total investment for this expansion is projected to be USD 346 Mn.
The details of the capacity expansion plan are as follows:
40 MW expansion of Salak Unit 7. This project will leverage the Salak Injection Realignment Program.
30 MW expansion of Wayang Windu Unit 3. This will involve the optimization of existing surface facilities to increase the total capacity.
18.4 MW capacity increase of Wayang Windu Units 1 and 2 thru an engineering retrofit. Each unit will be expanded to have a capacity of 124.45 MW. Fuji Electric Co. and PT Wasa Mitra are Star Energy’s partners for this initiative.
7.2 MW capacity increase of Salak Units 4, 5, and 6 thru the replacement of turbine rotors and diaphragms to improve efficiency. PT Fuji Electric Indonesia is the partner for this project.
7 MW capacity increase in Darajat Unit 3 thru technological upgrades. This will increase the capacity of Darajat Unit 3 from 122 MW to 129 MW.
These projects will be carried out in partnership with Fuji Electric Company, PT Wasa Mitra, and PT Mitsubishi Power Indonesia. Additionally, Star Energy has formed a partnership with PT Pertamina Geothermal Energy to enhance laboratory services and geochemical fluid analysis, further improving operational efficiency.
SEG SOLAR STARTS WORK ON MAJOR PHOTOVOLTAIC INDUSTRIAL PARK IN INDONESIA
Solar Energy Generation (SEG Solar), a leading photovoltaic module manufacturer in United States, has commenced construction of a large integrated photovoltaic (PV) industrial park in Batang, Indonesia, aimed at producing silicon ingots, wafers, cells, and modules. The facility is set to achieve an annual capacity of 5GW by the end of its first phase in Q2 2025. This project is part of SEG Solar’s international expansion strategy to diversify production and establish a presence in strategic regions vital for the photovoltaic sector’s growth.
The Batang Park will feature ten N-type cell production lines, utilising new renewable energy technology. SEG Solar plans to collaborate with local component suppliers, such as junction box manufacturers and Ethylene Vinyl Acetate film (EVA) producers, to create a comprehensive solar energy ecosystem. This initiative aims to reduce reliance on imported components and ensure a stable, traceable supply chain.
The Batang facility will also supply photovoltaic components to SEG’s factory in Houston, United States, reinforcing the company’s supply chain. The SEG Indonesia solar industrial park project will have an investment exceeding USD 500 Mn.
PT PLN AND ITS SUBSIDIARY TO BUILD GAS INFRASTRUCTURE IN INDONESIA
PT PLN (Persero) and its subsidiary PLN Energi Primer Indonesia (PLN EPI) have signed a memorandum of understanding (MoU) to build gas infrastructure on company-owned land in Indonesia.
This initiative aims to utilise over 100,000 land parcels to construct onshore gasification facilities, pipelines, and regasification units to support gas-powered electricity plants, particularly in Sulawesi, Maluku, Nusa Tenggara, and Papua. The project will reduce fuel costs and emissions, contributing to Indonesia’s clean energy goals, meanwhile also supporting local industrial development, especially in Sulawesi’s smelting sector.
CSI AND PIS TO EXPLORE MARITIME INFRASTRUCTURE IN INDONESIA
PT Chandra Shipping International (CSI), a subsidiary of PT Chandra Daya Investasi (CDI), and PT Pertamina International Shipping (PIS) have signed a memorandum of understanding (MoU) to explore a partnership in maritime logistics in Indonesia. This agreement focuses on a feasibility study to assess collaboration in the transportation of chemicals, bitumen, and other maritime logistics operations.
The partnership aims to enhance efficiency, sustainability, and the global reach of maritime transport operations, with a focus on adopting eco-friendly technologies. CSI and PIS plan to strengthen their market positions, particularly in petrochemical and industrial logistics, while the feasibility study will explore ways to optimise technology and improve supply chain operations. This collaboration is expected to boost service standards and set new benchmarks in Indonesia’s maritime logistics sector.
PERTAMINA NRE AND PIS TO ADVANCE TRANSPORTATION OF GREEN HYDROGEN IN INDONESIA
Pertamina New & Renewable Energy (Pertamina NRE), a subsidiary of Pertamina, has partnered with PT Pertamina International Shipping (PIS) to advance the transportation of green hydrogen and other sustainable fuels in Indonesia. The collaboration aims to capitalise on Indonesia’s strategic position along international shipping routes.
As demand for green hydrogen is projected to grow significantly—especially within the shipping sector, which is expected to require 6 Mn tons annually by 2028—this partnership seeks to address the high transportation costs associated with green hydrogen in the form of methanol and ammonia. The collaboration will focus on reducing transportation costs and improving efficiency in hydrogen distribution.
The deal is part of Pertamina’s broader goal to expand its renewable energy portfolio and support the global energy transition, with PIS contributing through its expertise in logistics, terminals, and sea transportation. The estimated investment for the infrastructure development is between USD 400 Mn and USD 700 Mn.
THE GOVERNMENT OF INDONESIA ENHANCES GEOTHERMAL CAPACITY WITH 90 MW EXPANSION
The Government of Indonesia has announced plans to add 90 MW of geothermal power capacity with three new plants—PLTP Salak Binary in West Java, Blawan Ijen Unit 1 in East Java, and Sorik Marapi Unit 5 in North Sumatra—launching by the end of 2024.
This expansion aligns with Indonesia’s clean energy targets, with geothermal energy now comprising 5.3 % of its power mix. The Government of Indonesia has invested USD 5.4 Bn in geothermal development over the last decade and plans to leverage co-generation technology to further enhance energy efficiency and meet its 2060 renewable goals. The project's investment in 2024 is USD 664 Mn, bringing the overall geothermal investment to USD 5.4 Bn over the last decade.
ADIA AND APG INVEST USD 1.4 BN IN INDONESIA’S TRANS SUMATRA TOLL ROAD
The Abu Dhabi Investment Authority (ADIA) and Dutch pension fund APG have partnered with the sovereign wealth fund of Indonesia, (INA) and are investing USD 1.4 Bn in Trans Sumatra Toll Road, Indonesia. This project includes the Medan-Binjai and Bakauheni-Terbanggi Besar sections, vital connections for economic hubs like Medan and important island linkages in Sumatra.
This investment marks a continuation of ADIA and APG’s partnership with INA, which started in 2021. The collaboration aligns with INA’s goal of enhancing Indonesia’s toll infrastructure with a broader investment target of USD 2.75 Bn across various projects.
NOVEMBER 2024
HYDROWING TO LAUNCH INDONESIA’S FIRST TIDAL ENERGY PLANT
UK-based HydroWing, a division of Inyanga Marine Energy, has entered an agreement with Perusahaan Listrik Negara (PLN) to build Indonesia’s first tidal energy plant, a 10-Megawatt (MW) facility located in East Nusa Tenggara. This project follows a 2022 memorandum of understanding (MoU) focused on advancing tidal power in the region and aims to utilise Indonesia’s high tidal flow between the Pacific and Indian Oceans. The plant is expected to bring stable, renewable energy (RE) to support local and national energy goals.
PLN will oversee site preparation, including surveys and environmental studies, while HydroWing will handle feasibility analysis, technology implementation, and long-term project planning. This initiative builds on HydroWing’s ongoing work in Southeast Asia, including a similar project in the Philippines, and reflects a broader push for sustainable power in island nations. HydroWing’s plant aims 24/7 renewable energy (RE) marking a significant step towards Indonesia’s commitment to reducing reliance on fossil fuels.
VOLTRON PARTNERS WITH INDOSAT TO EXPAND EV CHARGING IN INDONESIA
Voltron Indonesia has signed an agreement with Indosat Business to enhance its electric vehicle (EV) charging infrastructure in Indonesia. This collaboration aims to increase charging station accessibility, especially in regions currently underserved by the existing network. By utilising Indosat’s office locations, Voltron plans to improve the EV user experience and accelerate the adoption of EVs across the country. The project incorporates advanced digital solutions to ensure efficient and real-time monitoring of charging stations.
The partnership also aligns with the Enhancing Readiness for the Transition to Electric Vehicles (ENTREV) initiative, which focuses on educating the public about the benefits of EVs and their role in reducing emissions.
THE GOVERNMENT OF INDONESIA, FRANCE, AND EU COLLABORATE ON ENERGY TRANSITION
The Governments of Indonesia, France, and the European Union (EU) have strengthened their energy transition cooperation with a new agreement which aims to support Indonesia’s transition to a more sustainable energy sector, leveraging financial resources and technologies from France and the EU. This collaboration will focus on areas such as decarbonisation for small islands, green hydrogen, sustainable mining, and bioenergy production.
The five-year cooperation program, which starts in 2025, will receive financial support from the EU and Agency Franchise of Development (AFD). It is expected to foster policy dialogues, renewable energy projects, and the phasing out of coal, contributing to Indonesia’s net-zero emissions goal.
THE GOVERNMENT OF INDONESIA UNVEILS 75 GW RENEWABLE ENERGY EXPANSION
The Government of Indonesia has announced a 15-year plan to add 75 gigawatts (GW) of renewable energy (RE), focusing on solar, hydro, geothermal, and nuclear sources. The plan is to achieve net-zero emissions (NZE) by 2060, phasing out coal, and increasing renewables to meet 75 % of the 100 GW new capacity target.
Indonesia's current installed power capacity is more than 90 GW, with more than half of that powered by coal and less than 15% by renewables. It currently has no nuclear capacity, a controversial topic in a country prone to earthquakes. Further, PLN committed to building a 70,000 km green transmission line to support the plan. The Government of Indonesia also proposed carbon offset projects to further reduce emissions. The project will be estimated at USD 235 Bn.
GOLDEN DRAGON EXPANDS E-BUS FLEET IN INDONESIA WITH NEW CONTRACT
Golden Dragon Bus has secured a new 2024 contract to provide 90 high-floor electric buses to PT Bianglala Metropolitan (PT BMP) in Indonesia, following its delivery of 22 electric buses in 2023. The new buses are designed to withstand Indonesia’s climate and will operate on Jakarta’s Bus Rapid Transit (BRT) routes as part of the government’s push to adopt electric vehicles and reduce emissions. Golden Dragon also supports PT BMP with technical assistance and is collaborating with local partner PT Sinar Armada Globalindo (SAG) for service and future local assembly.
The Government of Indonesia aims to decrease emissions by prioritising electric vehicles in public procurement, backed by a 2019 government decree. This aligns with Indonesia’s growing public transport demand and its sustainable environmental goals.
INDONESIA’S FUTURE CAPITAL NUSANTARA’S FLYING TAXI TO OPERATE COMMERCIALLY IN 2029
The Nusantara Capital City (IKN) Authority is working to commercialise flying taxis or sky taxis by 2029 as part of the smart air mobility initiative in the future capital. Early-stage preparations, which include preparing airspace regulations, conducting technology assessments and doing other necessary research, are already underway to support this goal.
Phase I (2024-25) focuses on the proof of concept (PoC) and joint studies for policy development. The first PoC, a trial flight of a sky taxi, was successfully conducted on July 29 over Aji Pangeran Tumenggung Pranoto Airport in East Kalimantan. The four-minute test flight demonstrated the sky taxi’s stable performance at altitudes of 50-80 metres and speeds of 50km per hour, and it landed smoothly.
Phase II (2026-28) will focus on the operational implementation of sky taxis, including constructing a research and development centre (R&D) dedicated to Urban Air Mobility-Advanced Air Mobility (UAM-AAM) technologies and creating a viable business model for air mobility in Indonesia. This phase will also involve further collaboration with Hyundai Motors Company (HMC), Korea Aerospace Research Institute (KARI) and state-owned aircraft maker PT Dirgantara Indonesia on technology transfer.
Finally, Phase III (2029) will mark the commercialisation of the sky taxi service in the city, incorporating Indonesian companies in the supply chain. With a capacity of five people, the South Korean flying taxi uses a battery as its main energy source, which the government believes is in line with its target to develop an inclusive, green and sustainable new capital.
DAMRI TO DEPLOY 90 ELECTRIC BUSES TO ACHIEVE CARBON NEUTRALITY IN INDONESIA
Djawatan Angkoetan Motor Repoeblik Indonesia (DAMRI) will launch 90 electric buses by the end of 2024 in Indonesia, supporting the nation’s goal of achieving carbon neutrality before 2050. These buses, set to operate on the TransJakarta busway corridor, have been developed in partnership with international electric vehicle manufacturers and research organizations. They aim to reduce greenhouse gas emissions while offering efficient and cost-effective transportation.
The buses feature clean energy systems, modern interiors, and advanced energy management technology to ensure reduced operational costs and a longer range.
GOVERNMENT OF MEDAN LAUNCHES ITS FIRST FLEET OF 60 E-BUSES
The Government of Medan has introduced its first fleet of 60 high-end pure electric buses in Indonesia. The buses, procured from Suzhou Kinglong Higer Bus, are part of the Medan Transportation Management Bureau’s effort to enhance local public transit while supporting global emission reduction goals. The buses, equipped with features tailored for local conditions, will operate across six core routes, providing a cleaner, more comfortable travel option for residents.
The vehicles at Merdeka Square, are an upgrade in the city’s public transportation system. The buses feature advanced comfort features, including luxury seating, easy wheelchair access, and high corrosion resistance tailored for Medan’s climate.
DECEMBER 2024
JABODEBEK LRT TO INTEGRATE WITH SOEKARNO-HATTA AIRPORT TRAIN
The Government of Indonesia has announced plans to link the Jabodebek Light Rail Transit (LRT) with the Soekarno-Hatta Airport train (also known as Jakarta Airport Railink) to improve connectivity in Indonesia.
The Jabodebek LRT, launched in 2023 with a USD 2 Bn investment, has served 18 Mn passengers in 2024. Its operator, Kereta Api Indonesia, also manages the airport train, which saw 1.6 Mn passengers in the first nine months of 2024.
INDOSAT AND NOKIA PARTNER TO ENHANCE INDONESIA’S 4G AND 5G NETWORKS
Indosat Ooredoo Hutchison (IOH) has partnered with Nokia to upgrade 4G and 5G radio access networks in Indonesia. This collaboration will leverage Nokia’s radio technology to boost network connectivity, aiming to expand broadband access and strengthen the nation’s digital infrastructure.
Nokia will provide solutions from its cutting-edge AirScale equipment portfolio including multiband radio technology and high-capacity baseband solutions. Nokia’s advanced technologies, including AI and machine learning, will play a critical role in streamlining IOH’s network investments, ensuring the most efficient deployment of resources in high-demand areas. The deal will help IOH expand its network and improve service in key areas of the country.
The partnership also explores Fixed Wireless Access (FWA) solutions to improve connectivity in underserved areas, ensuring broader digital inclusion across Indonesia. Both companies are committed to advancing the country’s telecommunications capabilities.
BP ANNOUNCES USD 7 BN INVESTMENT IN INDONESIA’S FIRST LARGE-SCALE CCUS PROJECT
British Petroleum Company (BP) has officially announced a final investment decision for the USD 7 Bn Tangguh Ubadari CCUS Compression project (UCC), a significant initiative that aims to unlock approximately 3 Trn cubic feet of additional gas resources in Indonesia. The Tangguh UCC project is poised to be a landmark development in Indonesia, marking the country’s first large-scale implementation of carbon capture, utilisation, and storage (CCUS) technology.
This innovative approach is expected to enhance gas recovery while also sequestering around 15 Mn tonnes of CO2 emissions during its initial phase. This project not only unlocks a fantastic gas resource, but it also represents an Indonesian first with CCUS to maximise gas recovery. The UCC project will expand and utilise existing infrastructure at the Tangguh LNG facility located in Papua Barat, Indonesia.
Production at the Ubadari gas field is anticipated to commence in 2028. The investment reflects BP and its partners’ confidence in Indonesia’s investment climate and underscores their commitment to strengthening business operations within the country.
The Government of Indonesia has designated the UCC project as a national strategic initiative, which follows the recent addition of a third LNG train that began operations in 2023, increasing total plant liquefaction capacity to 11.4 Mn tonnes per year. This strategic location positions Tangguh favourably for accessing high-value regional markets and meeting the growing energy demands across Asia.
The UCC project is set to support local workforce development, with an aim for 85 % of its workforce to be Papuan by 2029. Currently, 99 % of Tangguh’s operational workforce consists of Indonesians, including 70 % from Papua.
V-GREEN, PRIME GROUP TO DEVELOP 100,000 EV CHARGING STATIONS IN INDONESIA
V-GREEN and Prime Group have signed a memorandum of understanding (MoU) to expand the electric vehicle (EV) charging infrastructure in Indonesia. Under the agreement, the companies will establish around 100,000 VinFast EV charging stations across the country over the next three years, with an investment of up to USD 1.2 Bn.
The move is aimed at facilitating the growing adoption of EVs in Indonesia. V-GREEN will initially focus on key urban areas including Jakarta, Surabaya, Bali, and their surroundings, with plans to broaden the network to other regions in future phases. The development is set to commence in Q1 2025, with several stations anticipated to be operational within 2025.
Prime Group, operating through its UAE subsidiary, will be responsible for securing the necessary funding for this project. The conglomerate's global network and financial strength will support the development of the VinFast EV charging infrastructure. V-GREEN's role will include market research, strategic location identification, and the construction and operation of the charging network. V-GREEN, Prime Group to develop 100,000 EV charging stations in Indonesia.
PLN INDONESIA POWER OFFERS HYDROPOWER PROJECTS TO JAPANESE INVESTORS
PT PLN Indonesia Power (PLN IP), a subholding of state electricity company PT PLN, invited Japanese investors during the Japan renewable energy Invest Indonesia 2024 event to join its decarbonization efforts by investing in hydropower projects, known as the Hydronesia Project, throughout Indonesia, specifically in Kalimantan, Java, Bali and Sumatra.
In addition to generating electricity for PLN, PLN IP is also developing Beyond KWh, a business which includes services such as operation and maintenance (O&M) for electricity generating companies. In 2023, PLN PR recorded a USD 546 Mn net income with total assets amounting to USD 25.75 Bn. PLN IP currently manages 21.4-gigawatt (GW) power plants across Indonesia, of which 16.98 GW power plants are connected to the Java-Bali network. Of those plants’ total capacity, 90 % is generated primarily from coal. Only 10 % of its power portfolio is from renewable energy, which has become a challenge for PLN IP.To support the government in achieving its net zero emission (NZE) target by 2060, PLN IP is committed to accelerating the development of renewable energy, focusing on hydropower, geothermal, wind, and solar energy. By 2030, PLN IP plans to add 9 GW of power capacity, with approximately 6 GW coming from renewable energy. Of this, 1 GW comprises 13 ongoing projects, the majority of which are solar power plants, and one is a wind farm project.
PLN IP is inviting partners for the Hydronesia project under a proposed ownership scheme of 51 % allocated to PLN IP and 49 % to the partner. The proposed ownership scheme, however, remains open for negotiation. The funding scheme for Hydronesia will be supported by 70 % project financing.
TRANSJAKARTA TO DEPLOY 200 MORE E-BUSES
PT Transportasi Jakarta (TransJakarta) has deployed 200 electric buses on its network in Indonesia. The buses have been supplied by the following China-based companies: Golden Dragon (90 buses), Skywell (60 buses), Zhongtong (30 buses) and BYD (20 buses). The buses will be operated by Perum Damri, PT Bianglala Metropolitan, and PT Sinar Jaya.
Transjakarta has a fleet of over 4,300 buses. Between January and September 2024, it had an average monthly ridership of over 31 Mn passengers. Transjakarta plans to transition to an all-electric bus fleet by 2030.
ADB PARTNERS WITH TBS TO ENHANCE SUSTAINABLE TRANSPORTION IN INDONESIA
The Asian Development Bank (ADB) provided a USD 10 Mn loan to PT TBS Energi Utama Tbk (TBS) to promote sustainable transportation in Indonesia by increasing the supply of electric motorcycles and battery swapping stations. The financing involves a USD 5 Mn ADB loan and another USD 5 Mn from the Australian Climate Finance Partnership. TBS will invest in Electrum for procuring e-motorcycles and installing battery swapping stations, which will reduce annual greenhouse gas emissions by at least 123,000 tons.
TBS, an Indonesian energy leader, operates in waste management, renewables, and electric vehicles. It operates across Singapore and Indonesia. In 2021, TBS founded Electrum, which focuses on e-motorcycles, batteries, battery swapping, and charging infrastructure. Indonesia, Southeast Asia’s largest automotive market, is a major source of greenhouse gas emissions and road transport significantly contributes to these emissions.
Indonesia is rapidly urbanizing and seeing a surge in private vehicle ownership, particularly motorcycles. By working with TBS in this project, ADB aims to increase the reliability of e-motorcycles and expand sustainable transport options for Indonesians. As ADB’s first private sector financing for the country’s e-vehicle industry, the project can demonstrate the commercial viability of e-motorcycles and encourage further investments to promote their use. In 2022, there were around 148 Mn two-wheelers in the country, but only 26,000 were electric.
SUN ENERGY AND SMBC INDONESIA TO ACCELERATE ENERGY TRANSITION
PT Surya Utama Nuansa (SUN Energy) has partnered with PT Bank SMBC Indonesia to secure a USD 10 Mn Multi Option Trade Facility in Indonesia. This collaboration aims to support the procurement of raw materials and the expansion of solar energy projects in the commercial and industrial sectors. SMBC Indonesia, which has already disbursed nearly USD 1.1 Bn in sustainable loans by Q3 2024, will provide key financial support, including letters of credit, bank guarantees, and working capital loans to facilitate SUN Energy’s project continuity.
This partnership highlights the role of private-sector collaboration in advancing Indonesia’s energy transition. It will enable SUN Energy to enhance its competitiveness in strategic tenders and ensure the success of ongoing renewable energy projects. Both parties are committed to driving a cleaner and more sustainable energy future, reinforcing the importance of green financing in the country’s energy transformation efforts.
PLANS UNVIELED FOR JAKARTA-SURABAYA HSR
PT Kereta Cepat Indonesia China (KCIC) is currently evaluating three potential routes for the extension of the Jakarta-Bandung high-speed rail (HSR) to Surabaya in Indonesia. These routes—southern, central, and northern—are being considered based on distance, cost, and construction complexity. The southern route is favored for its optimal balance of these factors. This HSR project is expected to boost Java’s economy, though the government must ensure balanced infrastructure distribution across other regions.
The project faces challenges, including the need for improved human resources to manage the advanced technology involved. Additionally, the institutional framework for overseeing the train’s operation is yet to be decided. The high-speed train is seen as a key economic driver but concerns over the return on investment for the Jakarta-Bandung route highlight the importance of careful planning for the Surabaya extension.
List of key transactions - Indonesia Q4 2024
Source: YOG INFRA, Public Information
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