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Jakarta Post

Government allocates $209m for electricity discounts

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Wed, April 1, 2020   /   06:38 pm
Government allocates $209m for electricity discounts Energy and Mineral Resources Ministry electrification director general Rida Mulyana addresses a press conference in Jakarta on Feb. 2. (PLN/PLN)

The government has allocated Rp 3.5 trillion (US$209.8 million) to provide free electricity and discounts to Indonesia’s lower-income households to help them get through the economic shocks caused by the COVID-19 pandemic.

The Energy and Mineral Resources Ministry’s director general, Rida Mulyana, said on Wednesday the funds, which are to come from the state budget, comprised about Rp 2.59 trillion for 25 million of Indonesia’s poorest households, Rp 630 billion for 7 million second-poorest households and Rp 280 billion for an anticipated spike in domestic electricity consumption.

“This way we will have space or room to accommodate higher consumption than recorded in 2019, prior to the warnings related to COVID-19,” he said, noting that the ministry was also ready to adjust the scheme over time.

The poorest households are defined as those within the 450-volt ampere (VA) category, while the second-poorest as those within the 900-VA range. State-owned electricity company PLN is to give free electricity to the 450VA homes for three months starting in April and a 50 percent discount to 900VA homes over the same period.

The electricity discount was one of six social safety net programs, including unemployment benefits and food aid, announced by President Joko “Jokowi” Widodo on Tuesday after he declared a COVID-19 public health emergency. 

Read also: Jokowi announces free electricity, discounts for households hardest hit by COVID-19 impacts

The safety nets are meant to help Indonesia’s lower-income families for whom electricity bills represents their fifth-highest non-food spending. Many of such families have been hit hard by business closures. The government also seeks to prevent Greater Jakarta’s unemployed from migrating out of the virus-ridden capital, potentially spreading the COVID-19 coronavirus to other provinces.

Explaining the discount distribution mechanism, the energy ministry’s director of electricity business development, Hendra Iswahyudi, said PLN would use a mobile app to distribute free or discounted electricity vouchers to eligible prepaid consumers.

He said the electricity company would waive the bills of postpaid 450VA customers and halve the monthly bills of postpaid 900VA customers. For the latter category, PLN will start with halving bills issued this month for power consumed last month.