Indonesia has taken major steps in accelerating the transition to renewable energy sources as part of global efforts to reduce greenhouse gas emissions and respond to climate change.
In this context, the Indonesian Capital City (IKN) offers promising investment opportunities in the renewable energy sector, with a projected development of 7 gigawatts (GW) from 2022 to 2045. The main challenge in realizing this potential is choosing the right investment scheme to accelerate implementation renewable energy projects at IKN.
One alternative investment scheme that can be considered is to become an independent electricity power provider for IKN through in-house development.
With this scheme, investors can build their own power generation infrastructure, including solar power plants, wind power and others, to meet IKN’s energy needs independently. The main advantage of this scheme is full control over operation and maintenance as well as potential long-term profits from energy sales to IKN.
The second alternative is to develop electricity generation through a Public-Private Partnership scheme with a source of income from availability payments. In this scheme, the government and private investors will work together in developing renewable energy infrastructure in IKN.
Investors will be responsible for the construction and operation of power plants, while the government will pay the availability costs for the energy produced. The main advantage of this scheme is that investment risk is more distributed between the government and the private sector and increases certainty of income for investors.
The third alternative is to establish a Business-to-Business (B2B) partnership with PLN to develop power plants in the Core Government and Trade Area (KIPP) 1A area.
In this scheme, investors will work together with PLN to develop electricity generation infrastructure, with PLN acting as an operational partner and energy buyer. The main advantage of this scheme is investor access to PLN’s experience and distribution network as well as the potential to expand market reach through energy sales to PLN and other consumers.
In facing investment opportunities in the renewable energy sector in IKN, investors need to consider various factors including the level of risk, certainty of income, and strategic partnerships with key stakeholders such as the government and PLN.
By choosing the right investment scheme, investment opportunities in the renewable energy sector in IKN have the potential to provide attractive returns while making a positive contribution to efforts to mitigate climate change and sustainable development in Indonesia.
Source : Bappenas