(Jakarta, 27th) Indonesia’s sovereign wealth fund, Danantara, plans to invest in renewable energy projects, with the main goal of exporting electricity to Singapore and supplying power to the Indonesian national grid.
According to the Jakarta Post, Danantara’s Chief Investment Officer Pandu stated that the proposed project includes building solar energy infrastructure and a cross-border transmission network. Once implemented, this is expected to be the largest solar power plant in Southeast Asia.
On Thursday (April 23), Pandu told Antara News Agency: “We will drive forward and assess our plans to export energy to Singapore.”
He also said that the project involves construction of the national grid and a transmission network connecting to Singapore, with a total investment of at least nearly 30 billion USD (about 118.59 billion MYR); the generated electricity will be exported to Singapore while also integrated into the national grid.
Pandu stated that some private enterprises have previously reached agreements with parties in Singapore, but currently, technical details or how the cooperation will be implemented cannot be disclosed.
Most solar power plants in Indonesia are connected to grids managed by the state-owned electric company. When renewable energy is unavailable, the grid can serve as a backup power source.
This model encounters issues in that unchecked expansion of solar power generation could pressure the state electric company’s ability to balance supply and demand, especially when there is a sudden drop in generation. This may cause grid interruptions, leading to unstable electricity and large-scale blackouts.
To mitigate such risks, the government has set quotas to ensure that the additional installed solar power capacity connected to the grid matches the load capacity of the state-owned electric company.
Last year, the Indonesian government also issued the National Energy Policy, designating the state electric company as the sole aggregator for electricity import and export.
This regulation allows cross-border electricity exports to enhance “the efficiency, reliability, and security of energy supply.” The regulation also stipulates that electricity imports must be handled by state-owned enterprises or representatives designated by the country.
As early as 2023, Jakarta and Singapore signed several memoranda of understanding regarding the construction of solar power plants, targeting operations at the beginning of 2028. However, construction has yet to begin.
The Straits Times reported in March that analysts said that to deliver on schedule, construction of solar power facilities should have already begun, but the project faces financing challenges.
An unnamed Indonesian business executive said that a key detail has made these projects “unable to obtain bank loans” because the risk is too high.
Specifically, Indonesia’s Ministry of Energy and Mineral Resources issued a regulation in 2021 requiring clean energy exporters to obtain a license, which must be renewed every five years.
According to the report, this regulation creates uncertainty, because if the government determines that electricity exports disrupt domestic power supply and may cause blackouts, it has the right to revoke the exporter’s license or reduce the quota.
On Thursday (April 23), Pandu told Antara News Agency: “We will drive forward and assess our plans to export energy to Singapore.”
He also said that the project involves construction of the national grid and a transmission network connecting to Singapore, with a total investment of at least nearly 30 billion USD (about 118.59 billion MYR); the generated electricity will be exported to Singapore while also integrated into the national grid.
Pandu stated that some private enterprises have previously reached agreements with parties in Singapore, but currently, technical details or how the cooperation will be implemented cannot be disclosed.
Most solar power plants in Indonesia are connected to grids managed by the state-owned electric company. When renewable energy is unavailable, the grid can serve as a backup power source.
This model encounters issues in that unchecked expansion of solar power generation could pressure the state electric company’s ability to balance supply and demand, especially when there is a sudden drop in generation. This may cause grid interruptions, leading to unstable electricity and large-scale blackouts.
To mitigate such risks, the government has set quotas to ensure that the additional installed solar power capacity connected to the grid matches the load capacity of the state-owned electric company.
Last year, the Indonesian government also issued the National Energy Policy, designating the state electric company as the sole aggregator for electricity import and export.
This regulation allows cross-border electricity exports to enhance “the efficiency, reliability, and security of energy supply.” The regulation also stipulates that electricity imports must be handled by state-owned enterprises or representatives designated by the country.
As early as 2023, Jakarta and Singapore signed several memoranda of understanding regarding the construction of solar power plants, targeting operations at the beginning of 2028. However, construction has yet to begin.
The Straits Times reported in March that analysts said that to deliver on schedule, construction of solar power facilities should have already begun, but the project faces financing challenges.
An unnamed Indonesian business executive said that a key detail has made these projects “unable to obtain bank loans” because the risk is too high.
Specifically, Indonesia’s Ministry of Energy and Mineral Resources issued a regulation in 2021 requiring clean energy exporters to obtain a license, which must be renewed every five years.
According to the report, this regulation creates uncertainty, because if the government determines that electricity exports disrupt domestic power supply and may cause blackouts, it has the right to revoke the exporter’s license or reduce the quota.