Indonesia's waste-to-energy industry has entered a golden era. On October 10, President Prabowo signed Presidential Regulation No. 109 of 2025, and the industry was activated after its official announcement on the 14th. A total of 120 companies have signed up to participate, including 54 international enterprises from China, Japan, Singapore, Germany, the Netherlands, and others.
The key change in the presidential regulation is the adjustment of the waste-to-energy profit model, from the previous "two sources of income" of electricity sales + government subsidies or waste disposal fees, to exclusive power purchase by the state electricity company PLN at a fixed rate of $0.20 per kWh with a 30-year contract. Moreover, all project tenders and coordination will be handled by the national sovereign wealth fund Danantara.
Four Key Policy Changes
1. More stable income: enterprises can profit solely from electricity sales, waste disposal fees are eliminated. If PLN's power purchase causes its average cost to rise, the state will compensate; enterprise profitability is clear.
2. Banks are more willing to approve loans, tender process is smoother: centralized management by the central government, Danantara is responsible for project selection, tender organization, and can also invest as a shareholder, avoiding fragmented local government actions.
3. Clear local government responsibilities: responsible only for land allocation and waste transportation, ensuring daily supply of at least 1,000 tons of waste; if supply falls short, compensation is provided to the enterprise according to the agreement.
4. Attractive electricity price: $0.20/kWh is higher than the current $0.12-0.15/kWh for photovoltaic power stations, recognizing the dual value of waste-to-energy as "public service + energy production."
Funding and Foreign Investment
After the policy was clarified, funds poured in, and foreign enthusiasm surged. In July this year, Danantara signed a cooperation agreement with the Japan Bank for International Cooperation (JBIC), covering low-carbon circular economy and infrastructure, opening channels for Japanese capital and technology. Cooperation with other countries will follow.
Project Investment and Rollout Plan
The Indonesian government plans to build waste-to-energy projects in 33 cities, with a total investment of approximately $5.5 billion (IDR 91 trillion). Currently, the plan does not roll out everywhere at once; it will start with a pilot in 10 cities to proceed steadily.
Progress in Selected Cities
Jakarta has taken the lead. A planned waste-to-energy plant can process 2,500-3,000 tons of waste per day and generate 35 MW of electricity. The city also plans to build 4-5 such plants simultaneously. Local officials said that with a price of $0.20/kWh, the plant can operate even without disposal fees. Previously, the Benowo plant in Surabaya and the Putri Cempo plant in Solo have been operating, accumulating engineering and operational experience that can serve as models for new projects nationwide.
Summary
Presidential Regulation No. 109 of 2025 has transformed Indonesia's waste-to-energy sector from a "small-scale pilot" into a "reliable investment category." With the electricity price, buyer (PLN), and tender organizer (Danantara) now confirmed, and international capital already entering, the next key is to ensure the integration of the "waste management system" and "power generation system" for stable 30-year operation. For investors interested in Indonesia's infrastructure and energy transition, this is a "golden window period" where both policy and funding are in place."
Indonesia's waste-to-energy industry has entered a golden era. On October 10, President Prabowo signed Presidential Regulation No. 109 of 2025, and the industry was activated after its official announcement on the 14th. A total of 120 companies have signed up to participate, including 54 international enterprises from China, Japan, Singapore, Germany, the Netherlands, and others.
The key change in the presidential regulation is the adjustment of the waste-to-energy profit model, from the previous "two sources of income" of electricity sales + government subsidies or waste disposal fees, to exclusive power purchase by the state electricity company PLN at a fixed rate of $0.20 per kWh with a 30-year contract. Moreover, all project tenders and coordination will be handled by the national sovereign wealth fund Danantara.
Four Key Policy Changes
1. More stable income: enterprises can profit solely from electricity sales, waste disposal fees are eliminated. If PLN's power purchase causes its average cost to rise, the state will compensate; enterprise profitability is clear.
2. Banks are more willing to approve loans, tender process is smoother: centralized management by the central government, Danantara is responsible for project selection, tender organization, and can also invest as a shareholder, avoiding fragmented local government actions.
3. Clear local government responsibilities: responsible only for land allocation and waste transportation, ensuring daily supply of at least 1,000 tons of waste; if supply falls short, compensation is provided to the enterprise according to the agreement.
4. Attractive electricity price: $0.20/kWh is higher than the current $0.12-0.15/kWh for photovoltaic power stations, recognizing the dual value of waste-to-energy as "public service + energy production."
Funding and Foreign Investment
After the policy was clarified, funds poured in, and foreign enthusiasm surged. In July this year, Danantara signed a cooperation agreement with the Japan Bank for International Cooperation (JBIC), covering low-carbon circular economy and infrastructure, opening channels for Japanese capital and technology. Cooperation with other countries will follow.
Project Investment and Rollout Plan
The Indonesian government plans to build waste-to-energy projects in 33 cities, with a total investment of approximately $5.5 billion (IDR 91 trillion). Currently, the plan does not roll out everywhere at once; it will start with a pilot in 10 cities to proceed steadily.
Progress in Selected Cities
Jakarta has taken the lead. A planned waste-to-energy plant can process 2,500-3,000 tons of waste per day and generate 35 MW of electricity. The city also plans to build 4-5 such plants simultaneously. Local officials said that with a price of $0.20/kWh, the plant can operate even without disposal fees. Previously, the Benowo plant in Surabaya and the Putri Cempo plant in Solo have been operating, accumulating engineering and operational experience that can serve as models for new projects nationwide.
Summary
Presidential Regulation No. 109 of 2025 has transformed Indonesia's waste-to-energy sector from a "small-scale pilot" into a "reliable investment category." With the electricity price, buyer (PLN), and tender organizer (Danantara) now confirmed, and international capital already entering, the next key is to ensure the integration of the "waste management system" and "power generation system" for stable 30-year operation. For investors interested in Indonesia's infrastructure and energy transition, this is a "golden window period" where both policy and funding are in place."