JAKARTA - The government released a new regulation regarding the provisions of the level of domestic components (TKDN) in electricity projects. This new regulation is said to facilitate investment in the development of new renewable energy (EBT).

The latest TKDN regulation is contained in Ministerial Regulation (Permen) ESDM No.11 of 2024 concerning the Use of Domestic Products for Electricity Infrastructure Development.

Director General of New Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources (ESDM) Eniya Listiani Dewi said that in the regulation, EBT projects funded by foreign grants or foreign loans are no longer required to include TKDN in tender documents.

"What is important in this regulation is that foreign grants are not required to include TKDN in bidding documents," Eniya told Bisnis, Tuesday (6/8/2024).

So far, the obligation to include TKDN is said to have hampered the funding of a number of EBT power plant projects. Based on Bisnis records, there are at least 14 EBT power plant projects that are constrained.

Four of the projects already have funding agreements from the Asian Development Bank (ADB), World Bank, Japan International Cooperation Agency (JICA), and other financing institutions with a total investment commitment of more than US$1 billion.

The four projects include the Cisokan Hydroelectric Power Plant (1,040 MW), Huluais Geothermal Power Plant (110 MW), Kumbih Hydroelectric Power Plant (45 MW) and Sawangan Hydroelectric Power Plant (16.6 MW).

Meanwhile, there are 10 other projects that have not reached agreements with lenders regarding the provisions of the TKDN clause in the power purchase agreement (PPA) with PT Perusahaan Listrik Negara (Persero) or PLN.

Meanwhile, the obligation to include TKDN was previously regulated in Minister of Industry Regulation (Permenperin) Number 54 of 2012 concerning Guidelines for the Use of Domestic Products for Electricity Infrastructure Development.

Simultaneously with the issuance of Permen ESDM No.11 of 2024, the Ministry of Industry issued Minister of Industry Regulation (Permenperin) No. 33 of 2024 which revoked Permenperin No. 54 of 2012.

"The issue of constraints for PLTP and PLTA is in international funding, which previously according to Permenperin No. 54 must include TKDN in the bidding document. Now it has been revoked," Eniya explained.

Not only grant projects or foreign investments, according to Eniya, Permen of ESDM No.11 of 2024 also makes it easy to fulfill TKDN for investment in other EBT projects.

"Even if it is not a grant or foreign investment, it is easier to implement because the threshold is easier to achieve," he said.

Meanwhile, the threshold for EBT project TKDN will be regulated in a derivative regulation in the form of a Decree of the Minister of Energy and Mineral Resources which will be stipulated in the next few days.

"The TKDN of industrial product components remains in accordance with the revised Permenperin. However, the TKDN of combined EBT project goods and services has been calculated and this greatly facilitates investment," said Eniya.

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