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Norwegian company to build $70m solar plant in touristy Labuhan Bajo

Scatec is among several renewables companies investing in the renewable energy industry of Southeast Asia’s largest economy

Norman Harsono (The Jakarta Post)
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Jakarta
Tue, March 10, 2020

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Norwegian company to build $70m solar plant in touristy Labuhan Bajo A number of tourist ships parked at Labuan Bajo Port in Komodo district, West Manggarai, Flores, East Nusa Tenggara. (thejakartapost.com/Markus Makur)

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slo-based multinational Scatec Solar plans to build a 70 megawatt (MW) solar photovoltaic (PV) plant in Labuan Bajo, a famous tourist destination in East Nusa Tenggara (NTT).

The $70 million plants are five times bigger than Indonesia's current largest solar PV plant, the 15MW Likupang solar farm in North Sulawesi. A developer plans to begin developing the 100 hectare Labuan Bajo farm later this year and starts its operation by 2022, a year before the province is slated to host a G20 summit.

"In Asia, our biggest operating country is Malaysia. Next in development is Vietnam and Indonesia," Scatec’s Southeast Asia representative Jeevaneswaran “Jeevan” Ramoo told The Jakarta Post on Monday (9/3).

Scatec is among several renewable companies investing in the renewable energy industry of Southeast Asia’s largest economy that attracted $1.5 billion last year, much tinier compared to investments in mining ($5.9 billion), electrification ($12 billion) and oil and gas ($12.5 billion).

Despite Indonesia’s commitment to boost renewables usage, investments into the domestic renewables energy have been deterred by unfavourable regulations such as tight local content requirements (TKDN) and unbankable Build, Own, Operate and Transfer (BOOT) schemes.

Scatec itself faces challenges in acquiring solar PVs for the Labuan Bajo plant due to local content requirement regulations. The company is obligated to use solar PVs that contain a minimum of 60 percent local content, making it difficult to import PVs.

Local content requirements for solar power plants were set at 26 percent in 2012. The Industry Ministry increased the threshold to 40 percent in 2017, 50 percent in 2018 and 60 percent in 2019 through ministerial regulation No 5/2017 on local content requirements for electricity infrastructure.

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