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This report by the Climate Policy Initiative examines the role of community-based renewable energy (RE) mini-grids in providing electricity to remote areas of Eastern Indonesia. Through four case studies in East Nusa Tenggara and East Kalimantan, the report identifies community ownership and consensus as critical factors for the success and sustainability of decentralized RE projects, contrasting these with the significant lack of private sector interest due to high costs and perceived risks.

This report analyzes barriers to private investment in Indonesia's decentralized renewable energy (DRE) sector, identifying regulatory hurdles, low returns on small-scale projects, and limited financing as key obstacles. Using Sumba Island as a case study, it proposes four innovative business models (including VOE and LOE joint ventures and PPPs with availability payments) and three financial instruments (risk pooling, asset-backed securities, and guarantees) to attract private capital and achieve national electrification and climate targets.