Industry players demand government to drop BOOT system in renewable projects
Saturday, December 23 2017 - 03:56 AM WIB
Renewable-based power plant developers urged the government to drop the current build, operate, own and transfer (BOOT) system in renewable-based projects, requiring them to transfer the power plant assets to state-owned electricity firm PT PLN after 30 years in operation when their contract with the state utility firm expires.
Paul Butarbutar, an official at the Indonesia Renewable Energy Community (METI), said that the BOOT requirement has discouraged investors from investing in new renewable projects, which in turn has undermined efforts to boost production of renewable energy in the country.
The demand was made during a meeting on Friday with Vice President Jusuf Kalla along with other power plant industry associations and the Indonesian Chamber of Commerce and Industry (Kadin).
METI also urged the government to revise other rulings unfriendly to renewable projects such as the minimum 20 years of capital investment depreciation used in determining the selling tariff of electricity from renewable projects, making the tariff unattractive to the renewable investors.
Meanwhile, Riza Husni, Chairman of the Indonesia Hydropower Developers Association (APPLTA) said that another discouraging ruling is that developers are subject to tax when transferring the assets to PLN.
The BOOT system requirement is set under the Minister of Energy and Mineral Resources Regulation No 10/2017 and Minister Regulation No 50/2017.
Deputy Minister of Energy and Mineral Resources Arcandra Tahar said on Friday that the ministry is currently in the process of reviewing the BOOT policy, and will seek ways how to translate the requests made by the industry players. (*)