Indonesia to Develop Electricity from Waste, Foreign Developers Must Transfer Technology

Jakarta — Indonesia’s State Investment Management Body, Danantara Investment Management (DIM), is accelerating the rollout of Waste to Energy (WTE) projects, which convert waste into electricity, whilst requiring all foreign developers to transfer technology as a condition of partnership.

Fadli Rahman, Director of Investments at DIM, emphasised that the company mandates foreign partners to undertake technology transfer as part of collaboration agreements. This is accomplished through the engagement and training of local workforce.

“Technology transfer is essential,” Rahman stated. “The condition depends on how many local employees work on these projects. That’s crucial. Local workers will receive training, and regional government officials will also be trained—sent to China, Japan, or Europe to learn how this operates.”

Rahman stressed that WTE projects are not merely about burning waste to generate electricity. Rather, these initiatives are designed as catalysts for transforming waste management systems in the regions where they operate.

“Waste to Energy projects are not simply about burning waste to produce electricity. These are waste management projects designed as catalysts for transforming waste management systems in those regions,” he explained.

Rahman disclosed that investment requirements for WTE projects in the initial phase average between USD 150–170 million per location. The initial development stage encompasses four cities: Bekasi, Denpasar, Yogyakarta, and Bogor.

“The total investment for the first batch averages USD 150–170 million per location. Let’s say USD 150 million for simplicity. So the total investment for the first batch across four regions would be USD 600 million,” Rahman noted.

Regarding financing, DIM has established a funding structure comprising 70% debt and 30% equity. The partnership arrangement allows foreign partners to hold a majority stake.

“DIM holds 30% whilst the foreign partner holds 70%, so funding comes entirely from abroad. This constitutes Foreign Direct Investment (FDI),” he added.