News - 07 June 2018

How to Give Rural Indonesia Light?

In many rural areas of Indonesia, the electrification rate is below 50 percent. (Antara Photo/Mohamad Hamzah)

By : Andre Woolgar

The government's ambition to provide electricity to all Indonesians faces the biggest challenges in rural areas, where difficult terrain and lack of infrastructure hinder the national utility company from extending the power grid.

Today, 95 percent of the country's households are electrified, close to the government's Indonesia Terang (Bright Indonesia) program's target of 97 percent by the end of 2019.

But still, remote and not easily accessible regions remain in the dark. Papua, where most of the villages can be reached only by bush planes, has only 49 percent of its households connected to the grid. The electrification rate in East Nusa Tenggara is also low —  59 percent. In Central Kalimantan it is slightly higher, at 76 percent.

It is uneconomical for cash-strapped state power company Perusahaan Listrik Negara (PLN) to build plants to power only some 100 homes. Those who install power generators in villages also face uncertain investment return.

"Don't worry about technology. The biggest problem is … where is the money coming from? Via investment, or grant or blended funding? How is that money going to be paid back?" Andre Susanto, founder of Inovasi Dinamika Pratama, a consulting company for renewable energy projects in Southeast Asia, said in a discussion last week.

PLN invests about $10 billion a year on power generation and distribution, with a monopoly on the latter. Drowning in debts, however, it has to spend almost double of that amount for interest payment.

According to Andre, to support the country's electrification, grantors such as the Green Climate Fund can be used to finance renewable energy projects in Indonesia's remote rural areas, involving local communities for sustainability. His team provides technical assistance, feasibility studies and training for such projects, to make sure they also serve to empower the communities and involve women.

The benefits from electrification are immediate.

Veronika Sri Setiawati, executive director of Yayasan Suluh Insan Lestari, an educational NGO working with communities living on the banks of the Baliem River in Papua, observed how greatly electricity opens access to education. The solar panels that have recently been installed in the area provide light for children to learn and do their homework.

"If there is light, they can study ... Education offers further enlightenment, for the future to be brighter," she said.

Jakarta Globe