TAXES
LAW
2
from the generation of electrical power by power plants, which is
known as the Basis Production Price (BPP), and which excludes
the costs involved in the distribution of electrical power. The
auction system especially offers German companies with their
advanced technology a chance to sell power plants to Indonesia
on a large scale. Following the issuance of the Decree, PLN has
announced the first package of competitively tendered solar PV
projects only couple of days ago.
E.g.
because of the low ceiling
price that was set, the tender was accompanied by the question
if this will be attractive enough for project developers in the
future.
Schulz Noack Bärwinkel
7
th
Edition | June 2017
Corporate
Indonesia Pushes Renewable Energy Sector
Government Assistance for Start-Ups
Indonesia with a steadily growing number of mobile and internet
users and a young, creative population is considered as one of the
promising future countries for the international start-up scene.
But potential founders keep on pointing out that more support
by the government would be required to fulfill Indonesia’s full
potential in this area in the future, especially in order to create
new technology in Indonesia.
Following this appeal by potential founders, the Head of the
Creative-Economy Agency (
BEKRAF- Badan Ekonomi Kreatif
)
recently issued a Regulation on the Granting of Government
Assistance for Startups in order to promote the start-up scene
in Indonesia. According to this Regulation, any startup which is
eligible to apply for assistance in the form of grants from the
government must have been or must currently be undergoing an
incubator program organized by the government.
Priority will be given to any start-ups which have enrolled with
the BEKRAF for a Pre-Start-Up program. To apply for grant
assistance, a startup must satisfy the relevant requirements
and also undergo a certain procedure set out in the appendix to
With Decree No. 12/2017 the Energy and Mineral Resources
Ministry of Indonesia conducts one important step to reach its
target to procure 23 percent of all energy fromnewand renewable
energy sources by the year 2025. The aimed 23 percent stand in
a strong contrast to the current proportion of around 7 percent -
showing that there is still a long way to go.
The new Decree requires the state electricity company PLN
to purchase electricity power generated by power plants that
utilize renewable energies (
i.a.
solar energy, wind, hydroelectric
power, biomass, biogas, urban waste as well as geothermal
energy). The power is purchased in one of the following two
ways: either through an auction system (where the power plants
utilize advanced technology, are of variable efficiency and/or
highly dependent on local weather conditions), or by using a
benchmark price or direct appointment mechanism (where the
criteria above do not apply).
Selection criteria for power plant tenderswill be
i.a.
the company’s
financial strength, the company’s ability to develop IPP projects
and its experience in power generation. The purchase price
should be calculated from the basic cost incurred by the PLN
Milena Strathmann
Attorney-at-Law
+84 8 6258 4949
the regulation. Then a Proxy Agency of the BEKRAF determines
which startups are eligible.
The Government grants will be sourced from the State Budget
of the BEKRAF and are to be used for the following purposes:
1) Capital development; 2) The development of infrastructure
and facilities; and/or 3) The enhancement of human-resource
capacities. Even though the new regulation is considered as a
step into the right direction by potential founders, it is criticized at
the same time as being too inflexible and not sufficient to protect
the Indonesian start up landscape in the ongoing international
competition for start-ups and new technologies.
Milena Strathmann
Attorney-at-Law
+84 8 6258 4949
Power Projects
