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To accelerate the development of renewable energy for electricity supply in Indonesia, the government, through the Ministry of Finance, has established a guarantee and risk mitigation mechanism to support investment and the sustainability of clean energy projects.

Minister of Finance Regulation No. 5 of 2025 is a strategic step in expediting Indonesia’s energy transition. By providing guarantee and risk mitigation mechanisms, the government aims to enhance the attractiveness of investment in the renewable energy sector and accelerate the decarbonization of the electricity sector.

This regulation is expected to provide legal and fiscal certainty for industry players, thereby encouraging the development of sustainable green energy projects in line with Indonesia’s commitment to achieving Net Zero Emissions (NZE) by 2060.

The regulation stipulates that government guarantees will be provided for:

• Renewable energy power plant development projects, especially those in collaboration with PT PLN (Persero).
• State-Owned Enterprises (SOEs) or special entities that secure financing from international financial institutions or issue bonds/sukuk to support the energy transition.
• Energy Transition Platform Managers, who are responsible for accelerating the early retirement of coal-fired power plants (PLTU) and developing green energy infrastructure as replacements.

Under this scheme, the government acts as a guarantor against payment default risks arising from various financing agreements, including:

• Power Purchase Agreements (PPA) between electricity developers and PT PLN (Persero).
• Financing agreements between SOEs and international financial institutions.
• Bond or sukuk issuances by relevant entities to raise funds for renewable energy projects.

The book ispublished for the international community, who need to understand the guidelines in English, and presented in a bilingual format with Indonesian and English texts appearing side by side.

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