Indonesia Power Sector Finance Dashboard

The Indonesia Power Sector Finance Dashboard (October 2025) analyzes investment flows in Indonesia's power sector from 2019 to 2023. It highlights a significant gap between current investments and the USD 246 billion required to meet 2030 climate targets, noting that fossil fuel (FF) investments—particularly in captive power for industrial use—continue to dominate over renewable energy (RE). The report also examines the operational efficiency and funding of the state-owned utility PLN.

• Indonesia faces a substantial investment gap to meet its 2030 climate targets, requiring a total of USD 246 billion, or approximately USD 19 billion annually. Renewable energy (RE) represents the largest portion of this need, requiring around USD 118.5 billion between 2018 and 2030, which is 48% of the total investment requirement.
• Between 2019 and 2023, fossil fuel (FF) technologies received the majority of power sector investment at 62%, more than double the 23% allocated to renewable energy (RE), which totaled USD 8.85 billion. Total reported investment reached USD 38.02 billion, but the report estimates an additional USD 10.63 billion in 'unreported' investment flowing into captive coal-fired power plants (CFPP).
• Private financial institutions provided 73.72% of power sector investment, but these funds primarily supported fossil fuels (59.25%), with a heavy reliance on private-foreign institutions, equity, and market-rate debt. In contrast, RE investment was mostly supported by domestic private sources, while foreign RE funding came primarily from public sources.
• Renewable energy investment is heavily concentrated in baseload sources, with hydropower and geothermal accounting for 72% of RE financing. Hydropower saw the highest investment at USD 4.8 billion, including projects like Mentarang Induk/Kayan (USD 2 billion) and Upper Cisokan Pumped Storage (USD 0.5 billion). Solar and wind represented only 11% of investments.
• Captive power investments (43% of total) are a major challenge as they skew toward fossil fuels, driven by Indonesia's 'down-streaming' policy implemented in 2020 to support nickel processing. While Presidential Regulation No. 112/2022 generally bans new coal-fired power plants, it provides an exception for captive plants in the industrial sector.
• Analysis of PLN's operational costs shows that coal plants account for the largest share of both annual operating costs (46%) and annual production (65%). The operational cost of coal is artificially lowered by the government's Domestic Market Obligation (DMO); if adjusted to export market prices, the operational cost of coal power plants would double from IDR 0.6k/KWh to IDR 1.2/KWh.
• PLN-owned solar plants are inefficient compared to benchmarks and Independent Power Producers (IPPs). PLN-owned solar has a capacity factor (CF) of only 4%, compared to 17% for IPP solar and a benchmark of 16%. This low production increases the cost per unit of electricity, potentially due to curtailment or low operational/technological efficiency.

APA

Bimo, R., Putri, T., Aulia, M., & Yusuf, B. (2025). Indonesia Power Sector Finance Dashboard. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/11/Indonesia-Power-Sector-Report-2025.pdf

Chicago

Bimo, Ravi, Tunjung Putri, Muhammad Aulia, and Berliana Yusuf. Indonesia Power Sector Finance Dashboard. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/11/Indonesia-Power-Sector-Report-2025.pdf.

Wikipedia

{{cite report |last1=Bimo |first1=Ravi |last2=Putri |first2=Tunjung |last3=Aulia |first3=Muhammad |last4=Yusuf |first4=Berliana |title=Indonesia Power Sector Finance Dashboard |publisher=Climate Policy Initiative |date=October 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/11/Indonesia-Power-Sector-Report-2025.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bimo2025indonesia, author = {Bimo, Ravi and Putri, Tunjung and Aulia, Muhammad and Yusuf, Berliana}, title = {{Indonesia Power Sector Finance Dashboard}}, institution = {Climate Policy Initiative}, year = {2025}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/11/Indonesia-Power-Sector-Report-2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }