High Interest of International Investors in Waste-to-Energy (PLTSa) Plants in Indonesia For Sceheduled program 2025 to 2034

33 POTENTIAL Waste-to-Energy (PLTSa) Plant Projects

A total of 85 companies have qualified for the Pre-Qualified Bidder List (Daftar Penyedia Terseleksi/DPT) for the phase two waste-to-energy (WtE) project. This is the initial stage to participate in the tender process. The number of participants increased nearly fourfold from phase one, which only had 24 companies. This increase reflects the massive potential of the WtE business, which also signals significant investment inflow opportunities for Indonesia.

The Indonesian Government is currently developing 33 waste-to-energy (PLTSa) plant projects, attracting interest from leading technology vendors from Japan, Europe, and China. PT Danantara Investment Management will finance this project through Patriot Bond funds, following the President's directives. The initial projects focus on seven cities, including Bali, Yogyakarta, and Medan, with official first tenders commencing on November 6, 2025. Twenty-four global companies, such as Mitsubishi Heavy Industries, Veolia, and China Everbright, passed the first phase of selection (DPT). With a target of 33 WtE project sites, US$ 2.72 billion (equivalent to Rp 45.4 trillion) is required to develop waste-to-energy (PLTSa) plants with a total capacity of 452.7 megawatts (MW) until 2034.

Every DPT company must form a consortium with local partners—whether private companies, State-Owned Enterprises (BUMN), or Regional Government-Owned Enterprises (BUMD)—to drive technology transfer and strengthen national capacity in waste management. The tender process runs simultaneously across seven cities, while the opening of the next DPT batch is planned to expand the participation of investors and technology providers. This initiative marks a crucial milestone in Indonesia's clean energy transition, while demonstrating the high potential of the waste-to-energy sector in attracting international investment and technological collaboration.

WtE projects serve not only as a solution to overcome the chronic urban waste accumulation crisis but also present a major opportunity for new and renewable energy (EBT) development that attracts foreign investment interest.

The appeal of these projects will further strengthen if executed with good governance. “The Indonesian government remains fully committed to ensuring that the entire selection process for WtE partners is conducted transparently and competitively,”.

The companies listed in the DPT come from both domestic and international origins. There are firms from South Korea and Japan with extensive experience in converting waste into energy. Both nations are renowned for developing modern incineration technology with strict emission standards. In addition, there are companies from China, Europe, India, and Singapore.

Despite being crowded with foreign entities, the Indonesian government requests that the processing technology used must be relevant to local Indonesian conditions. Therefore, the selection will rely on technical experience and the company's track record in waste management, rather than its country of origin. The approach to this project must be placed within the context of resolving the national waste emergency. Indeed, the primary function of WtE is as an environmental rescue instrument, while the generated electricity is a side benefit of the process. The success of WtE projects will be heavily determined by governance transparency, regulatory certainty, and sustainable green financing. “Projects like Waste-to-Energy require a mature combination of technology, financing, and governance,”.

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Three First-Wave WtE Locations Designated as National Strategic Projects

PT Danantara Investment Management (DIM) and PT Daya Energi Bersih Nusantara (Denera), a subsidiary of DIM focusing on Waste-to-Energy (PSEL) infrastructure development, support the designation of three PSEL facility projects as National Strategic Projects (PSN) by the Government of the Republic of Indonesia. The three projects include PSEL facilities in Bekasi, Greater Bogor, and Greater Denpasar, which are also part of the first wave of PSEL project implementation.

This designation refers to the Minister for Economic Affairs Regulation Number 16 of 2025, which includes the Integrated Waste Management Program in the National Strategic Project List, as well as Presidential Regulation Number 35 of 2018 and Presidential Regulation Number 109 of 2025 regarding the acceleration of eco-friendly technology-based waste-to-energy facility construction.

The PSN status confirms that the development of waste-to-energy facilities is now part of the national priority agenda. Besides contributing to the resolution of urban waste issues, these projects are also expected to support the expansion of the renewable energy mix, emission reduction, and more sustainable urban infrastructure development. The PSN designation for these three projects also provides key momentum in building the foundation of Indonesia's PSEL industry.

As a company formed to develop the national PSEL platform, Denera is tasked with developing waste-to-energy projects through strategic investment, technology selection, and cross-sector partnerships.

The PSN designation across these three first-wave locations demonstrates the Government's commitment to presenting integrated solutions to overcome the waste crisis. This initiative includes improving waste management systems, reducing dependence on landfills (TPA), and optimizing waste utilization into energy.

The PSN designation was issued through a National Strategic Project Certificate by the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP), Coordinating Ministry for Economic Affairs of the Republic of Indonesia, to each Project Development and Management Enterprise (BUPP) in the three locations.

The three BUPPs that have obtained PSN status are:

1. PSEL Bekasi City (West Java Province), executed by Bekasi Environment Nusantara;
2. PSEL Greater Bogor (West Java Province), executed by Nusantara Bogor New Energy
3. PSEL Greater Denpasar (Bali Province), executed by Nusantara Bali New Energy.

These three BUPPs were formed based on the selection of PSEL partners by DIM, where the BUPP will be responsible for the development and execution of the project in their respective locations in accordance with the plans and governance agreed upon with the government.

With PSN status, these projects will receive implementation support through strengthened coordination across ministries and agencies, facilitation in resolving project bottlenecks, and various instruments required to ensure development runs efficiently and on target.

This PSN designation shows that waste management through PSEL is no longer just a regional necessity but a part of national strategic interests. This status not only accelerates realization in the three initial locations but also serves as an important stepping stone for PSEL facility development in subsequent locations.

Through collaboration with the government, local governments, technology partners, and various stakeholders, it is expected to deliver solutions that not only answer urban waste challenges but also create sustainable environmental, social, and economic value for the public.

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About PT Daya Energi Bersih Nusantara (Denera) and Danantara Indonesia

PT Daya Energi Bersih Nusantara (Denera) is a company focusing on the infrastructure development of Waste-to-Energy (PSEL) established under PT Danantara Investment Management (DIM) to implement PSEL development as mandated in Presidential Regulation Number 109 of 2025. Denera operates as an entity that coordinates and accelerates the development of PSEL projects in Indonesia by merging investment governance, technology partners, and project executors within an integrated ecosystem.

About Danantara Indonesia

Danantara Indonesia, known as the Daya Anagata Nusantara Investment Management Agency (BPI Danantara), is a strategic investment management agency established under Law Number 1 of 2025. As an independent institution directly under the President, Danantara Indonesia holds the mandate to manage and optimize government investments and State-Owned Enterprise (BUMN) assets to support the achievement of the Asta Cita mission, the national strategic plan, and government programs in accelerating industrialization and economic growth. Utilizing a professional, transparent, and accountable approach, Danantara Indonesia aims to strengthen the governance of state assets, create added value for the economy, and enhance Indonesia's competitiveness in the global market.

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PSEL (Waste-To-Electricity Processing) Momentum To Build Renewable Energy Ecosystem That Accelarate The Energy Transition In Indonesia

 

Amidst the hype surrounding Danantara's planned investment in PSEL (Waste-to-Electricity Processing), many have welcomed this plan, considering it a significant step forward in driving the energy transition toward national energy independence. However, many also consider this inappropriate, as it would significantly burden the finances and operations of PT PLN (State Electricity Company), and make it difficult for PLN itself to invest in renewable energy.

We should really support this program because the main problem that the government wants to address through this program is the problem of urban waste which is already very severe. So the spirit of issuance the  Presidential Regulation No. 109 year 2025 is to overcome the waste problem in all cities in Indonesia which is very urgent at this time which is different from the spirit of Presidential Regulation No. 35 year 2018 which is more about the development of  PLTSa (electricity from waste). This is evident from the terminology used currently with PSEL (Waste Processing into Electrical Energy) which shows that waste is the first priority of this program and is different from the previous program with the terminology of PLTSa, where electricity is the main priority not the waste. In fact, the previous  program is less successful because the PPA (Power Purchase Aggrement) process with PT PLN involves many parties, very complicated and lengthy aspects. The program with the previous Presidential Regulation No. 35 of 2018 which targeted 12 cities in Indonesia has not been successful in promoting the PLTSa program as an alternative energy source and waste utilization and in actually waste problem is getting worse.

The latest Presidential Regulation No. 109 of 2025 is considered to simplify the PPA process with PT PLN, reduce the number of parties involved, and eliminate tipping fees from local governments and other potential waste producers. This makes waste management the sole responsibility of the IPP in the landfill area. This is expected to drastically reduce complaints about the mounting waste by reducing the volume of waste.

We must support the spirit of the PSEL program to address the urban waste problem and immediately benefit from electricity through a simplified PPA system. Furthermore, the PSEL program is expected to provide a strong momentum for building a "renewable energy ecosystem" in the energy transition towards sustainable energy independence in Indonesia.

However, there are many things we need to improve to achieve that.

With the current electricity oversupply of PLN, especially in Java Island, where by 2024 alone in 4 GW (Giga Watt), it will be difficult for PT PLN to absorb PSEL electricity if at the same time the construction of PLTS  (solar PV) is very intensive even though it is limited by an annual quota.

The current major waste problem is more prevalent in large cities on the island of Java and Bali, which average around 1,000 to 2,000 tons per day of waste production, while DKI Jakarta is the highest contributor at around 8,000 tons per day. If 1,000 tons of waste can produce 20 MW (Mega Watt) electricicty, then with a plan of around 33 PSELs and estimated around 20 units on the island of Java, there will be around 400 MW of additional electricity on the island of Java-Madura-Bali (Jamali), this is also a large amount for PT PLN Jamali which has a capacity of around 46 thousand MW but the peak load in 2024 is only around 28 thousand MW

In terms of price, 20 cents per kWh is very high compared to other electricity sources. This high price will complicate PT PLN's routine financial management and disrupt its routine operations. It will also make it difficult for PT PLN itself to invest in electricity from renewable energy sources. The difference between the purchase price of electricity from the private sector/IPP (independent Power Producer) and PLN's electricity cost (BPP) has been addressed through a government compensation scheme, but the process has been quite lengthy in the House of Representatives (DPR). The existence of the price compensation component actually masks the true picture of PT PLN's efficiency; PT PLN's inefficiency is masked by this compensation. This compensation cost differs from the cost of electricity subsidies for the poor citizen, where subsidies are related to a lower selling price than PT PLN's BPP. As of 2024, electricity subsidies are approximately 73.24 trillion rupiah, while electricity compensation is approximately 17.8 trillion rupiah.

So, how can we address these issues?

To create a conducive investment ecosystem for renewable energy, facilitating investor in development of renewable energy and maintaining the financial and operational health of PT PLN (State Electricity Company), We should manage compensation and subsidies through a special funding agency. This will ensure that PSEL and other renewable energy development activities are aligned with the available funding within the agency. This strategy will prevent PT PLN from having to pay substantial subsidies and compensation for several months.

The existence of this special fund is in line with the spirit of the EBT ( New and Renewable Energy) Bill. If the Bill is enacted, it will ensure the smooth implementation of renewable energy programs that support the decarbonization program in accordance with Indonesia's Nationally Determined Contribution (NDC) under the Paris Agreement of 31.89% by 2030.

As stated in Article 56 paragraph 3 of the pending Bill, "The New Energy and Renewable Energy Fund as referred to in paragraph (1) shall be used for":

    a. Financing New Energy and Renewable Energy infrastructure;

    b. Financing New Energy and Renewable Energy incentives;

    c. Compensation for Business Entities developing New Energy and Renewable Energy;

   d. Price subsidies for Renewable Energy where prices cannot yet compete with 

       non renewable Energy.

Therefore, given the current situation, a dedicated fund for renewable energy (NRE) is essential as soon as possible to create a conducive business environment for renewable energy development and support the energy sector's decarbonization program. This fund will be effective if the legal framework for the R&D Bill is enacted immediately.

Currently, deliberations on the 2022 Renewable Energy Bill have been delayed due to a dispute over power wheeling and stalled due to the replacement of House members. Deliberations on the Renewable Energy Bill are now in the hands of the 2024-2029 House of Representatives (DPR) member for immediate resolution.

Of course, to ensure the swift enactment of the EBT Bill, the power wheeling dispute must be resolved immediately. The power wheeling scheme is considered to increase the efficiency of new and renewable energy utilization while simultaneously encouraging the development of green electricity infrastructure in various industrial sectors.

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