Energy and Mineral Resources Minister Bahlil Lahadalia announced the program during the HIPMI-Danantara Indonesia Business Forum 2025 in Jakarta, emphasizing that implementation will be spearheaded by Danantara, Indonesia’s sovereign wealth fund.
“The presidential decree has been issued, and we are ready to move to the next stage. This will be prioritized for management by Danantara,” said Lahadalia.
Under the new framework, Danantara will oversee the development of Waste-to-Electric Energy Processors (PSEL) and coordinate investment, project selection, and management. The Energy and Mineral Resources (ESDM) Ministry will regulate pricing, licensing, and technical standards, while Danantara manages execution and investment partnerships.
To enhance investor confidence, the government has introduced a fixed feed-in tariff of $0.20 per kWh for 30 years, guaranteeing power purchase by the state utility PLN. This long-term contract model is designed to secure financing, reduce project risk, and ensure stability for investors in Indonesia’s growing clean-energy sector.
Environment and Forestry Minister Hanif Faisol Nurofiq described the regulation as a pivotal step toward solving Indonesia’s chronic waste crisis. The country generates an estimated 70 million tons of solid waste annually, much of it concentrated in rapidly urbanizing regions like Jakarta, Surabaya, and Medan, according to the Ministry of Environment and Forestry’s 2024 data.
“This decree responds directly to the nation’s waste emergency and aligns waste management with our renewable energy goals,” said Nurofiq. “Waste must be seen not as a burden, but as a resource that can contribute to national energy security.”
The regulation promotes clean conversion technologies that transform waste into electricity, biogas, biofuel, and renewable fuel oil, minimizing emissions and landfill dependency.
Local governments are responsible for preparing sites, ensuring continuous waste supply chains, and managing logistics to PSEL facilities. The Ministry of Home Affairs is expected to assist with regional coordination, particularly in metropolitan areas where infrastructure bottlenecks persist.
By prioritizing regional–investor partnerships, the initiative seeks to address long-standing challenges in Indonesia’s municipal waste collection and disposal systems. The national government estimates that more than 60% of existing landfills have exceeded their design capacity, and the new regulation aims to reduce landfill reliance by at least 20% by 2030.
Internationally, Indonesia’s waste-to-energy (WtE) framework aligns with broader regional trends. Similar programs are underway in Malaysia, where the Seelong WtE plant in Johor is expected to process 1,000 tons of waste daily by 2026, and in Vietnam, where Hanoi’s Soc Son WtE facility will generate 75 MW of clean power from municipal waste.
By leveraging sovereign wealth investment through Danantara, the country aims to attract private capital while addressing one of Southeast Asia’s most pressing environmental challenges.
If successfully implemented, the policy could convert up to 20,000 tons of urban waste per day into renewable energy, cutting methane emissions, reducing groundwater contamination, and improving air quality in major urban centers.
The waste-to-energy program complements Indonesia’s broader energy transition agenda, which targets 31% renewable energy in its national mix by 2030 and net-zero emissions by 2060.
