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Onerous rules holding back RI green energy sector, Chinese investors say
Business leaders cited local shareholding requirements, local content requirements and regulatory uncertainty, among other issues, as barriers to investment.
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(left to right) Riyadi Suparno, president director of Tenggara Strategics; Edwin Syahruzad, president director of PT SMI; Arthur Simatupang, chairman of Indonesia Independent Power Producers (APLSI); Eka Satriya, chair of energy and mineral resources at the Indonesian Employers Association (APINDO); and Zhao Fengjun, senior development manager of PowerChina, participate in a panel discussion at China RE Invest Indonesia in Jakarta on Jan. 18, 2024. (Tenggara Strategics /Tenggara Strategics )
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hinese investors say regulatory constraints are preventing them from making the investments they would like to in renewable energy projects in Indonesia and have asked the government to change its policies for the sector.
The president of the China Chamber of Commerce in Indonesia, Wang Kun, highlighted a regulation that required state-owned electricity company PLN to own at least a 51 percent share of energy projects in the country, a proportion some Chinese investors found burdensome.
Wang added that Chinese investors also found Indonesia’s local content requirements difficult to meet and suggested that the government provide more flexibility in the policy.
“In some cases, we cannot source locally,” Wang told audiences on Tuesday at the China RE Invest Indonesia event hosted by Tenggara Strategics, a think tank affiliated with The Jakarta Post.
Zhao Fengjun, senior development manager of PowerChina in Indonesia said the tender process for renewable energy projects lacked clarity and that investors often needed to wait for long periods for approval.
“For investors, they cannot wait,” Zhao said at the same event.
Read also: Indonesia to abandon 23% renewable energy target
