'Bright Indonesia' marches on after budget, political hiccups

'Bright Indonesia' marches on after budget, political hiccups

After months of delays, the Energy and Mineral Resources Ministry has
finally taken the first step toward realizing its Indonesia Terang (Bright
Indonesia) program, under which it is planning to electrify thousands of
remote villages by 2019.

The ministry's new and renewable energy director general, Rida Mulyana, said
on Tuesday that the ministry and state-owned electricity company PLN had
been working to jointly map out electricity needs in Papua and West Papua
provinces in an effort to realize the project.

The mapping, he said, would help both entities set priorities in the
procurement of electricity in the easternmost provinces.

"We have done a lot of studies and held discussions with PLN in both
provinces. After the mapping, we will immediately procure electricity
there," he said.

Through the program, the ministry expects to electrify 12,659 remote
villages, mostly in eastern Indonesia, through new and renewable energy
sources.

Aside from Papua and West Papua, electricity will be procured for Maluku,
West Maluku, East Nusa Tenggara and West Nusa Tenggara, as stipulated in the
latest plan.

The program was previously stalled for months due to budget cuts in the
revised 2016 state budget, as well as a Cabinet shake-up, which saw a change
in energy and mineral resources minister from Sudirman Said to Arcandra
Tahar and later Ignasius Jonan.

While working for Papua and West Papua, Rida said the ministry and PLN were
also studying other provinces as previously planned for the Indonesia Terang
program.

Currently, Papua's electrification ratio is only 45.93 percent while West
Papua's is 82.7 percent.

To electrify remote villages in Papua and West Papua, the government will
need a total investment of Rp 156.02 billion (US$11.92 million) and annual
operating fees of Rp 191.9 billion.

"Some 99.9 percent of residents in Bangka Belitung [province] have access to
electricity, while Jakarta has 98 percent. Papua and West Papua will match
them by the end of next year," Rida said.

The Indonesia Terang program was first established under the command of
former energy and mineral resources minister Sudirman, but it stalled after
he was replaced by Arcandra.

Arcandra, however, was dismissed from his position after less than a month
following public controversy about his US citizenship.

Last month, President Joko "Jokowi" Widodo inaugurated former transportation
minister Jonan to lead the ministry, with Arcandra serving as his deputy.

The revised 2016 state budget has also hampered the Indonesia Terang program
as Rida's directorate general, which is directly responsible for the
program, has been left with Rp 1.7 trillion from the Rp 2.1 trillion
originally stipulated.

However, Jonan has pledged that he will continue the program.

Institute for Essential Services Reform (IESR) executive director Fabby
Tumiwa previously criticized the major budget cut at the Directorate General
of New and Renewable Energy, suggesting that the sector was still
under-utilized in comparison with more traditional energy sources.

Fabby explained that the budget cut may hamper priority projects like
Indonesia Terang and went against the government's ambitious plan to boost
the national electrification ratio.

"This budget cut may give a negative signal to business players, investors
and development partners about the government's commitment to develop and
conserve new and renewable energy," he said.

Previously, the plan to procure electricity in Papua and West Papua was
solely executed by PLN, separate from the Indonesia Terang program.

However, PLN and the ministry synergized their efforts because they were
working toward the same objectives - procuring electricity in the provinces
through new and renewable energy resources.

The government also has another major electricity project, its 35,000
megawatt (MW) electricity procurement plan, but Rida said the program was
focused on Java.

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Link to Original Article:
http://www.thejakartapost.com/news/2016/11/10/bright-indonesia-marches-after
-budget-political-hiccups.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com