The Energy Regulation and Markets Review - Stikeman Elliott

Chapter 11
Indonesia
Pudji W Purbo 1
I
OVERVIEW
To secure the domestic energy supply and to support sustainable development the
government has enacted a National Energy Policy as a guideline for the management of
national energy. Through Presidential Regulation No. 5 of 2006, the government sets
out the target and purpose of the National Energy Policy, and policy measures to achieve
the target. Under Presidential Regulation No. 5 of 2006, the Minister of Energy and
Mineral Resources (‘the MEMR’) was tasked with preparing and issuing a blueprint for
the management of national energy. The current blueprint, supported by Law No. 30
of 2007 regarding energy, covers from 2008 to 2027 and contains policies on securing
domestic energy supply, public service obligation and management of energy resources
and its use over an archipelagic area spanning more than 5,000 kilometres (around 3,200
miles) 2 with a yearly population growth rate of above 1 per cent for the past five years. 3
i Policy in the electricity sector
The development of the domestic modern energy sector, initiated almost three decades
ago, commenced with the 1985 Electricity Law, with the state-owned company PT PLN
as the sole supplier of electricity. PT PLN, however, was unable to cater for the increase in
electricity demand that took place; in 1992, therefore, the government, allowed private
parties to enter the power generation business activities. The issuance of Presidential
Decree No. 37 of 1992 opened the way for large-scale power generation utilities, both
through government-planned projects as well as private participation.
1 Pudji W Purbo is a partner at Makarim & Taira S.
2 www.indo.com/indonesia/archipelago.html.
3 www.indexmundi.com/g/g.aspx?c=id&v=24.
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