The Indonesian power sector has made significant progress since the Asian financial crisis of 1998. However, the sector in general and state electricity corporation PLN in particular now face the most serious challenge to financial viability since then. The uptake of renewable energy lags far behind its peers, and government targets are unlikely to be achieved. Regional disparities in the quality of electricity supply persist, and PLN is finding it increasingly difficult to provide coverage to the remaining households without electricity.
To assure financial and environmental sustainability for Indonesia's power sector, this report proposes restructuring PLN and details innovative reforms for stronger governance and regulation.
The study covers the following topics: challenges in the Indonesian power sector, and the rationale for PLN restructuring; electric utility restructuring experience in selected countries; restructuring options for PLN; evaluation of these options and identification of a preferred option; and formulation of a PLN restructuring road map.