At the end of February 2020, the Minister of Energy and Mineral Resources (MEMR) issued Regulation No. 4 of 2020 (Reg. 4/2020), as a second amendment to MEMR Regulation No. 50 of 2017 on the Use of Renewable Energy for the Provision of Electric Power which was initially amended through MEMR Regulation No. 53 of 2018 (“Reg. 50/2017”).

Reg. 4/2020 was issued in order to accelerate the development of renewable energy in the electric power sector as well as to improve the economic value of power plants using sources of renewable energy that were partly or fully built by the Government of Indonesia (“GoI”). According to Reg. 50/2017 renewable energy in Indonesia is geothermal, wind, bioenergy (i.e. biomass, biogas, and biofuel), solar, water current (hydro), and wave/tidal (sea water movement and difference in sea water temperatures) energy. In brief, Reg. 50/2017 focuses mainly on: (i) regulating the tariffs for electric power generated by renewable energy power plants; (ii) the scheme for the procurement of renewable energy power plant projects; and (iii) the scheme for cooperation with the state electric power company (PT Perusahaan Listrik Negara (Persero)-“PLN”) as the off-taker. Meanwhile, Reg. 4/2020 covers the following 5 (five) new areas previously not covered by Reg. 50/2017:

1. an additional scheme for the procurement of electric power generated by renewable power plants;
2. the Build, Own, Operate and Transfer (“BOOT”) scheme no longer applies for renewable power plants;
3. a new provision on hydro-electric power plants sourced from reservoirs/dams or irrigation pipes built by the GoI (through the Ministry of Public Works and Housings);
4. the assignment (penugasan) of municipal waste-to-energy power plants; and
5. the assignment of projects financed by grants (hibah) or other finances sourced from the GoI, other thanthe State Budget (Anggaran Pendapatan Belanja Negara–“APBN”).
   
   

Given the above, below is a summary on the noteworthy provisions of Reg. 4/2020.