10 Nov 2025
Electricity Infrastructure Acceleration: What’s New in PR 89/2025

The President recently issued Presidential Regulation No. 89 of 2025 (“PR 89/2025”) on Electricity Infrastructure Acceleration, the second amendment to the framework established by Presidential Regulation No. 4 of 2016, as amended by, Presidential Regulation No. 14 of 2017 (together, the “Prior Regulations”). This update aims to accelerate electricity-infrastructure development by harmonizing its provisions with existing regulations. The key changes are summarized below.

1. Clearer and More Flexible Requirements for PLN Subsidiaries

   Under PR 89/2025, Electricity Infrastructure Development (Pembangunan Infrastruktur Ketenagalistrikan or PIK) may be carried out through cooperation between PT PLN (Persero) (“PLN”) and either a PLN subsidiary or an Independent Power Producer (IPP). Where PLN’s subsidiary is involved, such cooperation is permitted only if PLN also collaborates with another business entity. 

   While the Prior Regulations required PLN to maintain at least 51% ownership in its subsidiaries—either directly or through other PLN subsidiaries—PR 89/2025 provides greater flexibility for PLN subsidiaries in partnering up with another business entity as there is no longer a specific required share percentage for PLN to maintain in the subsidiary’s shareholding structure. Rather, the ownership percentage can now be determined based on the needs, capabilities, and mutual agreement of the parties. This flexibility allows more adaptable and negotiated arrangements, while still upholding the spirit of PLN’s controlling interest as set out in the Prior Regulations.

   In practice, when PLN cooperates with other business entities to implement electricity-infrastructure projects, it generally issues a Request for Proposal (RFP) to potential bidders. Although not expressly regulated by law, it seems nowadays very common for PLN to specify in the RFP that its subsidiary can participate in the project company, by holding shares. 

2. Shift of Local Content Requirements to the Ministry of Energy and Mineral Resources (MEMR)

   PR 89/2025 shifts the authority to set minimum local content requirements for combined goods and services in electricity infrastructure projects from the Ministry of Industry (MOI) to the Ministry of Energy and Mineral Resources (MEMR). Under Prior Regulations, the use of local goods and services was encouraged, with standards and price benchmarks established by the MOI. 

   Under the new regime, MEMR is now responsible for determining the minimum local-content threshold for combined goods and services in electricity-infrastructure projects, thereby centralizing and reinforcing the local content policy within the energy sector. This change is consistent with MEMR Regulation No. 11 of 2024, which already governs the combined local content for goods and services in such projects. However, MEMR Regulation No. 11 of 2024 sets out that the calculation of local content for goods and services individually remains under the MOI regime. 

3. Streamlining of Licensing and Non-Licensing Provisions

PR 89/2025 simplifies the regulatory framework by removing detailed licensing and non-licensing procedures previously contained in Articles 19 to 28. These deleted provisions had included specific rules on delegation of authority, processing, timelines, and sanctions for delays in the licensing process, which was then handled through one-stop integrated service (Pelayanan Terpadu Satu Pintu/PTSP). 

With the deletion of these articles, the regulation eliminates many procedural requirements and shifts the licensing regime from PTSP to the general risk-based business licensing system (Online Single Submission Risk Based Approach (OSS-RBA)). This shift is reinforced by the addition of Article 30A, which requires that all nomenclature and business licensing under PR 89/2025 conform to the risk-based business-licensing system, marking a move towards streamlining licensing procedures with the broader business licensing framework. 

Again, these are not entirely new provisions, as there are already existing regulations that govern electricity licensing under the OSS-RBA (e.g., Government Regulation No. 28 of 2025 regarding the Organization of Risk-Based Business Licensing, which revokes Government Regulation No. 5 of 2021). 

ABNR Commentary

Although many of the provisions introduced under PR 89/2025 are not entirely new and are largely in line with existing regulations, the regulation represents a meaningful step forward in Indonesia’s efforts to accelerate electricity-infrastructure development by ensuring regulatory consistency. The government appears to be taking steps to facilitate the participation of both domestic and international stakeholders in the sector by making partnership structures more flexible, centralizing local content requirements under the MEMR, and streamlining licensing procedures. Overall, PR 89/2025 reflects a strong push towards a more dynamic, efficient, and investment-friendly electricity sector in Indonesia.

By partners Serafina Muryanti (smuryanti@abnrlaw.com), Maher Sasongko (msasongko@abnrlaw.com), and associate Adya Sepasthika (asepasthika@abnrlaw.com).

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.