Jakarta – The Indonesian government continues accelerating the national energy downstreaming agenda through various funding schemes, including allocating the State Budget (APBN). This step is regulated in Presidential Decree (Keppres) No 1 Year 2025 on the Task Force for Accelerating Downstreaming and National Energy Security, which President Prabowo Subianto has just issued.
The Presidential Decree appoints Minister of Energy and Mineral Resources Bahlil Lahadalia as Chairman of the Task Force. In a statement on Friday, January 10, Bahlil explained that the Task Force’s main tasks include identifying and planning for downstream resources from various sectors, including energy, forestry, fisheries, and agriculture.
“The President asked us to formulate locations and resources prioritised for downstream immediately. The Task Force is also responsible for designing various financing options, ranging from banking schemes to the state budget,” Bahlil said in a press conference.
One of the mechanisms regulated in the Presidential Decree is using the state budget through State Capital Injection (PMN) to State-Owned Enterprises (SOEs) mandated to implement downstream projects.
“If we talk about PMN, it is a form of state budget intervention. For example, when SOEs are given certain responsibilities, they need additional capital to carry out these tasks. That’s where PMN plays its role,” Bahlil said.
However, he emphasised using the state budget as the last option. The government prioritises the involvement of the private sector, both from national and international banks.
“We want to avoid using the state budget as much as possible. The main focus is to seek funding from non-APBN sources, such as the capital market or pure private investment,” he added.
IRR of downstream projects as investment attraction
According to Bahlil, downstream projects in Indonesia have a competitive Internal Rate of Return (IRR), which is expected to attract the interest of the banking sector and private investors.
“This is a good IRR. It should be attractive enough for the private sector and banks. We will develop policies that can strengthen the IRR value to be more attractive to market players,” Bahlil explained.
In addition, the government is also developing policies that support financing innovation to ensure the smooth implementation of downstream projects.
“We will create more varied and efficient sources of financing so that the downstream process can run without overburdening the state budget,” he said.
SOEs are spearheading the implementation of downstream energy, both through direct investment and partnerships with the private sector. With PMN support, state-owned companies are expected to strengthen their capacity and accelerate the implementation of strategic projects.
The government is optimistic that this step will accelerate the realisation of the downstream agenda, which is an important part of the vision of national energy and economic independence.
“Through downstreaming, we not only increase the added value of natural resources but also create jobs and encourage sustainable economic growth,” Bahlil concluded. (Hartatik)
