Indonesia power and renewable markets H2 2018 summary

Indonesia's electricity demand continued to grow slowly in the first half of 2018. On the supply side, the 35 GW programme has progressed with about 7% of the projects completed by August. We expect further growth as PLN has also secured a US$1.62 billion syndicated loan for power projects from 20 international banks. In addition, the state-owned power utility has obtained another US$304 million to finance transmission grids and substations. These will transfer power all around Java to the demand center in Jakarta and also improve the reliability of power supplies in Java and Bali. On the renewables front, however, the government has issued a new regulation that will further deter households and industrial consumers from adopting distributed solar generation. The regulation includes a power export price cap at 65% of the end-user electricity tariff and an additional grid connection charge for industrial solar panel owners.