Government finalizing new law to boost renewable energy investment
Monday, October 6 2025 - 09:38 AM WIB
By Adianto P Simamora
The Indonesian government is finalizing a draft law aimed at accelerating investment in renewable energy by strengthening regulatory certainty and addressing key bankability barriers.
The proposed law—currently in inter-agency discussion—seeks to provide a stronger legal foundation for clean energy development compared to the current presidential regulation framework. It is expected to outline provisions on tariff certainty, streamlined permitting, and long-term offtake security.
“We are preparing a renewable energy law that will provide more clarity and assurance for investors,” Harris, Head of the Center for Electricity Survey and Testing at the Ministry of Energy and Mineral Resources (ESDM) said.
“This will support the national target and build investor confidence in long-term project viability.”
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The current regulatory environment, guided by Presidential Regulation No. 112/2022, is considered a transitional measure. While it introduced benchmark pricing for renewables, stakeholders have raised concerns about limited implementation consistency and the need for legislative backing.
The new law is part of efforts to help Indonesia meet its renewable energy target of 23 percent of the national energy mix by 2025, and to pave the way for a net-zero emission pathway by 2060.
“We must create an ecosystem where renewable projects can be financed more easily and built more quickly,” Harris said, adding that the legal certainty is key.
The bill is expected to include incentives for grid integration, risk-sharing mechanisms, and carbon market alignment, all of which are seen as necessary to unlock large-scale solar, hydro, and geothermal investments.
Editing by Reiner Simanjuntak