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Indonesia energy ministry issues ruling to partly dismantle PLN monopoly in power distribution

JAKARTA (RambuEnergy.com) – The Indonesian Energy and Mineral Resources (ESDM) Ministry has issued new ruling that will allow private sector to develop smaller-scale power plants and distribute it by themselves to the customers in the surrounding areas.

Under the existing ruling, PLN monopolize the distribution of electricity to customers. However, the rule applies to small scale power plants in remote areas.

The new ruling provides opportunities to private sector, local government companies (BUMD), cooperatives to develop power and distribute the electricity by themselves, without having had to cooperate with PLN.

The ruling was signed by the Minister for Energy and Mineral Resources Minister Ignasius Jonan.

Director for Electricity Development Program at the energy ministry Alihuddin Sitompul said the ruling encourages private sector and local government companies to develop power plants up to 50 MW and distribute the electricity directly to customers.

He said the goverment provides incentives to private sector or investors who are interested to become alternative to PLN. The government hopes the move would speed up the drive to improve electrification ratio in the country and allow 2,500 villages to enjoy electricity.

The power plants could be in the form of fossil and renewable energy such as waste-to-energy power plant, diesel power plant and solar power plants (PLTS). (*)

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