Indonesian Waste-to-Energy Project Faces Financial and Technical Challenges

The Indonesian government plans to build waste-to-energy (WtE) plants in 33 provinces across the country to solve the urban waste problem and increase the supply of green energy. The total investment for the project is estimated at 300 trillion rupiah, with funding coming mainly from the State Investment Management Agency (Danantara). The Minister of Economic Co-ordination confirmed that the project is fully funded by Danantara, however, the Minister of Finance previously said that it may be financed from the state budget (APBN).
In addition, local governments need to provide land and ensure a 20-year supply of garbage, the current rate of garbage disposal is only 60%, 40% is still discarded; 70% of Indonesia's garbage is high-moisture organic waste, which requires pre-processing to increase the cost; and the cost of generating electricity from garbage (5-13 million dollars/plant) is higher than that of solar/hydroelectricity.
UGM academics pointed out that shifting responsibility for waste management to developers would make it economically unviable; IESR emphasized that dozens of facilities would need to be built in tandem to achieve the 2029 "zero-waste" goal; and Celios pointed out that the cost of sorting and transporting waste could drive up electricity prices.
The government is currently revising a presidential regulation that proposes to eliminate the waste disposal fee paid by the local government and instead have the developer assume the risk. Analysis suggests that if not properly planned, the project could become a new burden on the national treasury.