Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia

The report analyzes the implementation of renewable energy (RE) mini-grids in Eastern Indonesia, specifically in East Nusa Tenggara and East Kalimantan. It finds that while private sector interest in small-scale RE projects is low due to high costs and perceived risks, community-driven approaches—characterized by local ownership and the use of Village-Owned Enterprises (VOEs)—are critical for sustainability. Through case studies in Muara Enggelam, Watukarere, Mata Redi, and Treweng, the document highlights that success depends on community consensus, capacity building, and the integration of energy access with local economic development. It recommends that the Indonesian government prioritize inclusive, community-based frameworks and streamlined investment mechanisms to achieve universal energy access.

• Private sector investment in small-scale renewable energy projects in Indonesia is hindered by high unit costs, high interest rates, perceived investment risks, and a lack of de-risking instruments.
• Successful renewable energy implementations in the studied regions share a common reliance on community-driven approaches, featuring full ownership and consensus on management and financing, even without private sector involvement.
• In Muara Enggelam, a 35 kWp communal solar grid (later expanded to 45 kWp) funded by a Special Allocation Fund of IDR 3.9 billion enabled the local Village-Owned Enterprise (VOE) to diversify into swallow's nest farming and reduced household electricity costs from IDR 80,000 to IDR 50,000 per month.
• The project in Watukarere failed to achieve sustainability due to a lack of community ownership, insufficient technical capacity, and the inability of low-income residents to pay for operations and maintenance (O&M).
• The Mata Redi project, funded by the UK's MENTARI program, utilizes two solar units (60 kWp and 35 kWp) to power 220 households and public facilities, while fostering economic growth in ginger and lemongrass cultivation and empowering women through farmer groups.
• Treweng Island illustrates the risk of stranded assets; a 30 kWp communal solar grid was abandoned after the state-owned utility PLN established a larger 110 kWp grid in 2020, as there was no budget for the old grid's O&M and PLN was reluctant to acquire the existing assets.

APA

Saio, R. (2024). Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia. Climate Policy Initiative. https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/

Chicago

Saio, Rindo. Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/.

Wikipedia

{{cite report |last1=Saio |first1=Rindo |title=Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia |publisher=Climate Policy Initiative |date=31 July 2024 |url=https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{saio2024electrifying, author = {Saio, Rindo}, title = {{Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia}}, institution = {Climate Policy Initiative}, year = {2024}, month = jul, url = {https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }