President Prabowo Subianto has set the stage for a transformative era in Indonesia’s sustainable development, signing Presidential Regulation (Perpres) No. 109/2025 on October 10, 2025. This landmark policy, focusing on the conversion of waste into electrical energy (Waste-to-Energy or WTE), is poised to redefine the nation’s environmental and energy landscape. Replacing the previous Perpres No. 35/2018, the new regulation introduces critical enhancements designed to attract robust investment, foster innovation, and accelerate the deployment of vital WTE infrastructure across the archipelago.

Perpres 109/2025: A Game-Changer for WTE Investment

The recently enacted Perpres 109/2025 is more than just an update; it’s a strategic overhaul designed to supercharge the economic viability and operational longevity of WTE projects. This forward-looking framework addresses key investor concerns, offering greater predictability and more attractive returns.

Driving Forces Behind Investor Confidence: Key Policy Shifts

• Elevated Electricity Purchase Prices by PLN: Under the new Perpres, the national electricity utility, PLN, will purchase power from WTE operators at a flat rate of US$0.20 per kWh, irrespective of plant capacity. This marks a significant increase from the previous tiered pricing structure, which hovered around US$0.13 per kWh. Such a substantial hike signals a clear commitment from the government to make WTE projects unquestionably commercially appealing.
• Extended Power Purchase Agreement (PPA) Duration: Investors can now look forward to a 30-year power purchase agreement with PLN, commencing from the project’s commercial operation date. This long-term contractual stability, previously absent in regulations, provides the bedrock for financing large-scale infrastructure, offering unprecedented certainty for return on investment and facilitating easier access to capital.
• Elimination of Tipping Fees: In a calculated strategic move, the new regulation removes the maximum IDR 500,000 per ton tipping fee previously paid to WTE operators for waste management services. This adjustment, while seemingly a reduction in direct revenue, is more than offset by the significantly increased electricity purchase price. It streamlines the financial model, shifting the primary revenue stream squarely onto energy generation, aligning WTE projects more closely with traditional power production assets.

Danantara: Architecting Indonesia’s WTE Future

A pivotal player in this unfolding narrative is Danantara, an entity now tasked with a dual mandate to ensure the strategic and sustainable implementation of WTE projects. Danantara’s responsibilities include:

• Selecting developers and operators: Spearheading the rigorous selection process for qualified business entities to develop and manage WTE facilities.
• Facilitating commercially viable investments: Undertaking direct investments in WTE projects deemed commercially, financially, and risk-management sound.

The formation of WTE operators can be achieved through flexible partnership models, encompassing collaboration between local governments and state-owned enterprises (BUMN), regional-owned enterprises (BUMD), or private sector entities, fostering a dynamic ecosystem of participation.

The Green Gold Rush: Market Response and Strategic Opportunities

The market’s enthusiasm for Indonesia’s updated WTE framework is palpable. Rosan Perkasa Roeslani, CEO of Danantara, revealed on October 16 that a staggering 107 prospective investors have expressed interest in the nation’s waste-to-energy projects. This impressive roster includes 53 domestic players and 54 international entities, underscoring the global recognition of Indonesia’s WTE potential.

The Ministry of Environment has identified 10 strategic cities poised for immediate WTE implementation, acting as crucial launchpads for this initiative:

• Jakarta
• Tangerang
• Bekasi
• Bandung
• Yogyakarta
• Semarang
• Surabaya
• Medan
• Bali
• Makassar

These urban centers, grappling with significant waste management challenges, represent prime opportunities for investors seeking to generate both environmental impact and substantial financial returns.

The Path Ahead: A Sustainable and Profitable Tomorrow

President Prabowo Subianto’s Perpres 109/2025 is a bold declaration of Indonesia’s commitment to sustainable development and renewable energy independence. By offering attractive pricing, long-term contracts, and a streamlined regulatory environment, Indonesia is not just inviting investment; it is rolling out the red carpet for a future where urban waste transforms from a liability into a valuable energy asset. The stage is set for a new era where environmental stewardship and economic prosperity converge, powered by the ingenuity of waste-to-energy.