IEEFA: Fact Sheet: How a dedicated transmission subholding can accelerate Indonesia’s grid investment
Tuesday, June 30 2026 - 09:47 PM WIB
(June 30, 2026)--Indonesia’s electricity transmission network is critical to the country’s energy transition and requires around USD2.4 billion in annual investment, yet expansion and modernization continue to lag behind the needs of renewable energy deployment, electrification, and regional electricity trade. The widespread blackout in Sumatra in May 2026, followed by the collapse of 12 transmission towers, and subsequent power disruptions, highlight how extreme weather, together with constrained transmission capacity and limited network resilience, continue to expose system vulnerabilities. These events underscore the need for timely investment at scale to advance modernization and strengthen grid reliability and resilience. IEEFA’s fact sheet explores how a dedicated transmission subholding within the national electricity utility PLN could help secure long-term infrastructure financing while preserving public ownership. Electricity transmission is among the lowest-risk infrastructure assets in the energy system, but in Indonesia, it is financed through PLN’s consolidated balance sheet, where grid assets are blended with generation exposure, fuel price volatility, foreign exchange risk, subsidy delays, and long-term power purchase commitments, resulting in higher financing costs and slower investment.