Among the new laws and regulations being issued by the new administration, the Minister of Finance ("MOF") has issued Regulation No. 5 of 2025 on Guidelines for the Granting and Implementation of Government Guarantees and Risk Taking in the Acceleration of Renewable Energy Development in Electricity Generation ("MOF 5/2025"). The regulation was issued on 21 January 2025.
MOF 5/2025 demonstrates the Government of Indonesia’s readiness to support the development of clean-energy power plants by providing government guarantees for (i) renewable power projects and (ii) the transition from steam power plants to renewable power plants, as well as taking on the risks involved in geothermal power projects.
In this alert, we will focus only on government guarantees for renewable power projects under a power purchase agreement (“PPA”) with PLN.