Client Alert – Reforms on Local Content Governance for Indonesia Power Projects
Following the longstanding dilemma of balancing the utilization of domestic goods and services in Indonesia with the need to have a more competitive electricity tariff and to attract foreign investment for power infrastructure development, especially for renewable projects, the Government of Indonesia issued series of regulations related to local content, which reform the governance of local content requirements for power projects development in Indonesia, namely:
1. On 25 July 2024, the Minister of Industry (MoI) issued MoI Regulation No. 33 of 2024 (MoI Reg 33/2024) which revoked the regulation that previously governed Local Content Threshold – MoI Reg 54/2012. On the same day, however, the MoI issued MoI Regulation No. 34 of 2024 on the Procedures for Calculation of the Value of Domestic Components of Solar Module Products (MoI Reg 34/2024).
2. Shortly thereafter, on 30 July 2024, the Minister of Energy and Mineral Resources (MEMR) issued MEMR Regulation No. 11 of 2024 on the Use of Domestic Products in the Development of Electrical Infrastructure (MEMR Reg 11/2024).
Regardless of different issuance dates, all those three new regulations only came into effect on 31 July 2024.
What are the implications of these series of regulations to local content requirements for power projects development in Indonesia?
Please check our client alert here: Client Alert MEMR Reg 11 of 2024 (The Use of Domestic Goods)
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