Alternative Models for Transmission Financing in Indonesia

Indonesia requires an estimated USD 24 billion to expand its transmission infrastructure by 47.76 thousand circuit kilometers between 2025 and 2034. Because the state-owned utility PLN cannot fund this alone, the report proposes shifting from corporate-level finance to project finance structures using special purpose vehicles (SPVs) and long-term revenue contracts. The evaluated models include leasing, joint ventures, public-private partnerships (PPPs), infrastructure investment trusts (InvITs), and collective investment schemes for infrastructure (CIS-DINFRA). Successful implementation depends on three policy enablers: a dedicated transmission fee, off-balance sheet treatment, and targeted fiscal support.

• PLN's Electricity Supply Business Plan (RUPTL) 2025–2034 requires an estimated total investment of USD 24 billion to target approximately 47.76 thousand circuit kilometers of transmission lines and substations.
• The report identifies five project financing models to enable private investment: leasing and joint ventures (JVs) for lower complexity near-term projects; public-private partnerships (PPPs) for balanced risk allocation; and infrastructure investment trusts (InvITs) and collective investment schemes for infrastructure (CIS-DINFRA) for scalable, long-term capital mobilization.
• Three foundational policy enablers are necessary for these models to work: a dedicated transmission fee for predictable revenue, off-balance sheet treatment to protect PLN's financial capacity, and fiscal support such as guarantees or subsidies to bridge the gap between regulated tariffs and investor returns.

APA

Climate Policy Initiative (2026). Alternative Models for Transmission Financing in Indonesia. https://www.climatepolicyinitiative.org/publication/alternative-models-for-transmission-financing-in-indonesia/

Chicago

Climate Policy Initiative. Alternative Models for Transmission Financing in Indonesia. 2026. https://www.climatepolicyinitiative.org/publication/alternative-models-for-transmission-financing-in-indonesia/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Alternative Models for Transmission Financing in Indonesia |date=12 May 2026 |url=https://www.climatepolicyinitiative.org/publication/alternative-models-for-transmission-financing-in-indonesia/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2026alternative, author = {{Climate Policy Initiative}}, title = {{Alternative Models for Transmission Financing in Indonesia}}, institution = {Climate Policy Initiative}, year = {2026}, month = may, url = {https://www.climatepolicyinitiative.org/publication/alternative-models-for-transmission-financing-in-indonesia/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }