Opinion: Legal challenge to RUPTL 2025 could delay Indonesia's power projects and strain state budget

By Rikordias Siahaan

The ongoing lawsuit against the 2025–2034 Electricity Supply Business Plan (RUPTL) is raising significant concerns—particularly regarding its potential impact on Indonesia’s energy sector. In early September 2025, the Union Workers (Serikat Pekerja) of state-owned electricity firm PT PLN (Persero) filed a lawsuit with the Jakarta State Administrative Court, challenging the decision by the Minister of Energy and Mineral Resources to approve the RUPTL for the 2025–2034 period. If the court rules in favor of the plaintiffs, the legal challenge could disrupt several critical aspects of the sector’s development.

1. Disruption to PLN’s negotiations with Independent Power Producers (IPPs)

The lawsuit challenges the heavy reliance on Independent Power Producers (IPPs), which is set to account for 73% of the power generation capacity outlined in the RUPTL. This focus on privatized power generation has been a point of contention, with the plaintiffs arguing that the state should retain a larger role in electricity supply, in line with constitutional mandates that emphasize the nationalization of key industries. A favorable ruling for the plaintiffs could significantly disrupt ongoing negotiations between PLN and IPPs, as it could force the government to reconsider the degree to which private companies are involved in power generation. This could lead to delays or changes in critical power projects, as IPPs might hesitate to proceed under the uncertainty created by the legal challenge.

2. Financial strain on PLN and the state budget

If the court sides with the plaintiffs and mandates a revision of the RUPTL, PLN would likely be forced to take a more active role in power generation, especially in sectors previously earmarked for private investment. This shift would require PLN to build and operate new power plants using its own equity and loans, a challenging prospect given the current financial climate. Indonesia's state budget is already under significant strain, with a deficit expected to soar in the coming year. Allocating additional government funds to PLN for power plant construction seems unlikely in this context, as the government is already facing pressure to balance its fiscal responsibilities.

3. Return to the outdated 2021 RUPTL

Should the lawsuit succeed, the power sector's development may revert to the outdated 2021 RUPTL, which has since become irrelevant in the context of current energy demands and national sustainability goals. The 2021 plan, which predates recent technological advancements and shifts in energy policy, no longer aligns with the need for cleaner energy solutions or the current market dynamics. Reverting to this old plan would significantly delay Indonesia's energy transition, undermining progress toward the country's net-zero emissions target and hindering the development of a modern, sustainable power sector.

If the lawsuit succeeds, it would create a substantial roadblock for the Indonesian power sector, hampering the progress of crucial energy projects, burdening PLN with the responsibility of financing and constructing new power plants in a financially constrained environment, and potentially forcing a return to an outdated RUPTL that no longer meets the needs of Indonesia's evolving energy landscape. This legal challenge underscores the ongoing tension between the public and private sectors in Indonesia's energy policy and highlights the difficulties of balancing constitutional obligations with the realities of energy infrastructure financing.

Editing by Reiner Simanjuntak