Accelerating the Development of Electrical Infrastructure

Presidential Regulation No. 4 of 2016 (“2016 Regulation”)on the Acceleration of Electrical Infrastructure Development has just been issued.The aim of the 2016 Regulation is to support economic growth by accelerating the development of electrical-power infrastructure (Pembangunan Infrastruktur Ketenagalistrikan– “PIK”) in order to produce some 35,000 MW of electricity. This electricity is to be delivered through a new transmission network which will hopefully stretch a full 46,000 KM in length. The use of renewable energy will also be prioritized over fossil fuels in these PIK projects.The 2016 Regulation is of relevance to the State Electricity Company(“PLN”)and its subsidiaries, as well as to Independent Power-Plant Developers(“PPL”), financial institutions and regional/central governments.Delivery MechanismPLN is responsible for accelerating the development of PIK projects [1] via two delivery mechanisms: