Jokowi’s heart is for the underdog and grassroots people. So, no wonder if we saw him put a lot of concern in electricity. He knows that there are still so many people in this country craving for an electricity for their lives.
It’s also one of the reasons why this country lacks of competitiveness since infrastructure problem make Indonesia as one of the high cost economy country.
According to PLN, power outages in almost all areas are caused by a power shortage. If special attention is not paid to this and no extraordinary breakthroughs are made, we could have a power crisis within the next three to four years. This would fail to support people’s activities, decrease industrial competitiveness and slow down economic growth.
A limited power supply, which leads to an inability to meet growing needs, is caused by the lack of power plant development of 6.5% compared to the 8.5% growth in electricity demand over the last five years.
The lack of development is caused by various issues, such as problems with land acquisition, regulations, licenses, funding and electricity price negotiations between PLN and private companies.
Currently, total national installed capacity is 50,000MW produced by power plants built by PLN and private companies since PLN’s establishment. With an economic growth projection of 6-7% per year, within 5 years, we will need an addition power production of 35,000 MW or 7,000 MW per year.
Therefore, the government has no option but to increase power capacity by 35,000MW. This electrification program is a strategic national program as stated in the National Mid-Term Development Plan 2015-2019.
The program of 35,000 MW production will require huge investment amounting to more than Rp 1.100 trillion. In order to maintain financial capability, PLN will build power plants to produce 10,000 MW. The remaining 25,000 MW will be offered to Independent Power Producers.