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<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\nA senior executive at one of the companies told ST on condition of anonymity that these projects \u2013 involving the construction of vast solar farms, laying of undersea transmission cables and procuring solar panel electric storage \u2013 require billions of dollars of investment and would not be able to proceed without external financing.<\/p>\n
\u201cProjects of such a magnitude, there is no way any company can fully finance it with internal cash,\u201d he added. \u201cHow can we continue to generate revenue and service debts if after five years, we are told to stop exporting?\u201d<\/p>\n
The mismatch between permit tenure and financing horizon is why several companies find themselves caught in a bind, analysts noted.<\/p>\n
\u201cThey are expected to secure a 20-year electricity sale and purchase contract, so this five-year review cycle obviously creates uncertainty\u201d, hence the situation is going \u201cnowhere\u201d, said\u00a0Mr\u00a0Fabby Tumiwa, chief executive officer of Jakarta-based think-tank Institute for Essential Services Reform.<\/p>\n
Mr Fabby noted that the previous Indonesian energy minister, Mr Arifin Tasrif, had initiated a review to revise Clause 37 sometime after he met Singapore\u2019s then Second Minister for Trade and Industry Tan See Leng in Jakarta in September 2023. However, Mr Arifin was\u00a0replaced\u00a0in a Cabinet reshuffle in August 2024, before the revision could be completed.<\/p>\n
ST understands that companies with electricity export licences had discussed this matter with the ESDM\u00a0sometime\u00a0in 2025.<\/p>\n
Ministry spokeswoman Dwi Anggia declined to comment when\u00a0contacted\u00a0by ST.<\/p>\n
Cross-border solar projects<\/p>\n
Indonesia and Singapore have been discussing terms of a possible agreement for a planned sale of solar power from Batam to Singapore via an undersea cable, aligning with Singapore\u2019s broader efforts to import low-carbon electricity.<\/p>\n
The planned sale of solar power is part of an MOU on renewable energy signed by the two countries in March 2023. It was witnessed by then Indonesian President Joko Widodo\u00a0and\u00a0then Prime Minister Lee Hsien Loong during the annual leaders\u2019 retreat in Singapore.<\/p>\n
In September 2024, Singapore\u2019s Energy Market Authority (EMA) granted two more companies conditional approvals to import low-carbon electricity: Singa Renewables, a joint venture between TotalEnergies\u00a0and\u00a0RGE, and Shell Eastern Trading, which is in partnership with Vena Energy.<\/p>\n
This\u00a0came on top\u00a0of the\u00a0five conditional licences\u00a0EMA gave out the year before to\u00a0entities\u00a0including Pacific Medco Solar Energy, Adaro Solar International and Keppel Energy.<\/p>\n
EMA\u2019s move raised the anticipated import volume of clean electricity from 2GW in September 2023 to as much as 3.4GW a year later. The EMA had also raised its overall 2035 low-carbon electricity import target to 6GW, from 4GW in September 2023.<\/p>\n
Still fledgling, Indonesia\u2019s\u00a0solar energy market\u00a0is expected to grow steadily from\u00a02.15GW\u00a0in 2025 to 14.91GW by 2031, according to global research company Mordor Intelligence.<\/p>\n
In February 2025, ESDM asked Singapore to invest in\u00a0local\u00a0supply chains \u2013 such as the manufacturing of solar panels \u2013 in Indonesia, tying the request to the electricity sale to Singapore, according to the Indonesian government.<\/p>\n
In June the same year, Indonesia\u2019s Minister for Energy and Mineral Resources Bahlil Lahadalia and Dr Tan signed MOUs in Jakarta to jointly develop a sustainable industrial zone in the Riau Islands province, where Batam is located.<\/p>\n
\u2018Should have started by now\u2019<\/p>\n
When asked about updates on the planned sale of electricity to Singapore, the parties involved declined to comment on questions regarding Clause 37.<\/p>\n
\u201cWe are always prepared to support government programmes and are waiting for the next directives,\u201d Ms Karina Novianti, head of corporate communications at Alamtri, formerly known as Adaro, said in a written response to ST.<\/p>\n
MedcoEnergi\u2019s chief executive officer Roberto Lorato said his company is engaging with potential electricity distributors in Singapore to ensure its delivery timeline aligns with market demand. One of MedcoEnergi\u2019s subsidiaries is part of the Pacific Medco Solar Energy consortium.<\/p>\n
\u201cWe remain committed and support the government\u2019s efforts to create a positive investment climate, while ensuring that the project fully complies with all applicable regulations and delivers benefits for both countries,\u201d he said.<\/p>\n
However, Mr Fabby doubted that the companies involved could meet the projected 2028 timeline.<\/p>\n
\u201cIf they were to meet the 2028 first delivery target, they should have started major construction by now, by 2026,\u201d he said. \u201cHow could they start if external financing cannot be secured?\u201d<\/p>\n
Responding to ST\u2019s queries regarding the projects\u2019 potential delay, ESDM\u2019s acting director general of electricity Tri Winarno replied in a text message: \u201cUp to now there is no deal, on what benefit(s) we get if we export electricity to Singapore.\u201d He did not elaborate.<\/p>\n
Political will to push through<\/p>\n
Yet, energy analysts pointed out that Indonesia\u2019s renewable energy sector stands to gain if the project proceeds.<\/p>\n
\u201cThe sale to Singapore will help Indonesia\u2019s renewable industry sector to properly develop and thrive. If we were solely to rely on the domestic market, renewables would struggle to take off due to limitations in local purchasing power,\u201d said Mr Komaidi Notonegoro,\u00a0executive director of the Jakarta-based\u00a0ReforMiner Institute, a think-tank focusing on energy, economy and mineral resources.<\/p>\n
Having a neighbouring country willing to purchase Indonesia\u2019s renewable energy at an attractive price would increase the country\u2019s revenues and offer an opportunity to develop its solar industry, he added.<\/p>\n
Exporting 3.4GW of clean electricity to Singapore is estimated to generate between US$4 billion (S$5.1 billion) and US$6 billion in annual foreign exchange earnings, according to\u00a0media reports.<\/p>\n
Mr Komaidi pointed out that there has been a longstanding tendency for new administrations to introduce new development projects and deprioritise the ones from before.<\/p>\n
Agreeing, Mr Yusri Usman, executive director of Jakarta-based think-tank Centre of Energy and Resources Indonesia, said the core issue in this case is \u201ca deficit of ownership\u201d.<\/p>\n
The initiative was championed by the previous government, while the new leadership likely sees little political capital in pushing it across to completion, he said.<\/p>\n
\u201cThe person in charge of this particular project now was not part of the initial plan. This caused the slow progress,\u201d he added.<\/p>\n
Mr Fabby said the project may be hindered by personal or political biases at the expense of national interests, warning that reneging on this project may carry negative implications for Indonesia\u2019s broader investment climate.<\/p>\n
\u201cPeople would see that Indonesia made a commitment \u2013 with ministers and the president agreeing to do it \u2013 but once the leadership changed, the execution did not proceed,\u201d he said.\u00a0\u201cPresident Prabowo Subianto\u00a0should weigh in on this. If he knows about this, he will take the necessary steps.\u201d<\/p>\n
Mr Prabowo officially took over as Indonesia\u2019s eighth president in October 2024, replacing his predecessor, Mr Widodo, who was president for 10 years from\u00a02014. THE STRAITS TIMES<\/p>\n
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