New Report Out! Introduction to Indonesia Investments' June 2025 Report

These RUPTLs are the strategic roadmaps of Indonesia for power sector development over the coming decade. This latest edition, which puts great emphasis on renewable power development, covers the 2025-2034 period.

This RUPTL is a crucial document, serving as the official, detailed master plan for Indonesia's entire electricity sector development for the next decade, dictating how the country's energy needs have to be met, how the energy transition is to unfold, and how significant (public/private) investments are to be channelled. It therefore affects government policy, the private sector, and society as a whole.

We devote a lot of attention to PLN’s latest RUPTL in this June 2025 report because energy is crucial for economic and social development of Indonesia. Energy powers industries, transport and businesses, while also enabling better health, education, poverty alleviation, communication, and safety. In essence, energy is fundamentally important for societal progress.

What is particularly interesting about the RUPTL 2025-2034 is that it shows a heavy focus on the energy transition from fossil fuels (which today still dominate power generation in Indonesia) to renewable energy. This is a challenging transition that is not without risks.

The other main topic – one that is highly related to energy – discussed in this report is poverty. The reason why we picked this topic is because the World Bank decided to revise its international poverty lines in June 2025 to ensure that its measurements reflect current global conditions and the evolving costs of meeting basic needs.

What is the impact of this revision on Indonesia (where poverty remains a structural problem)? Well, it allegedly raises Indonesia’s national poverty rate to a whopping 68.3 percent. So, if we use the international standard, more than half of Indonesia’s population lives in poverty. However, if we look at the national standard (set by the Statistical Agency of Indonesia, BPS), then the national poverty rate only stands at 8.6 percent. This is a huge discrepancy that deserves some detailed attention.

This also brings to mind the topic of unemployment in Indonesia that we discussed in our May 2025 report. Whereas BPS puts the national unemployment rate at 4.76 percent (of the workforce), one can seriously question its alignment with reality, in particular when considering the methodology used by BPS and high prevalence of part-time workers and underemployment found in Indonesia.

In this month’s report, we are putting the spotlight on Indonesia’s poverty situation, with two main questions in mind: (1) is the World Bank overestimating poverty in Indonesia, or (2), is BPS underestimating poverty in Indonesia? Well, I can already reveal here that the answers to both questions are “yes”.

Returning to energy, the government’s ambitious energy transition is risky because the shift to renewable energy sources could potentially disrupt the electricity supply (for example, solar and wind power are examples of intermittent power, meaning they are not continuously available due to factors that cannot be directly controlled, such as the intensity of sunshine and wind speeds), or could make electricity more expensive (for example, nuclear and geothermal power require huge investments at the early stages that could translate into higher prices of electricity).

Disruptions in the electricity supply or big inflationary pressures would have a very negative effect on poverty as millions of Indonesians live in near-poverty (and who could be pushed into full-blown poverty in case of inflationary pressures). That is why the energy transition needs to happen in a very cautious and pragmatic manner. If the electricity supply becomes disrupted, it essentially dismantles the very tools and opportunities that allow individuals and communities to earn, learn, stay healthy, and climb out of poverty, thus severely deepening their destitution.

The trouble with energy-related price pressures is that energy is essentially the key input material for everything, so when energy becomes more expensive it is not only the electricity bill that goes up, but all products and services become more expensive because energy is crucial for manufacturing and transport.

While the Indonesian government might be willing to keep fuel and electricity prices artificially low for poorer segments of society (through subsidies, taken from annual state budgets), it cannot artificially keep prices of all products/services comfortably low.

This June 2025 report, therefore, serves as an examination of these interconnected challenges, and aims to provide an analysis of Indonesia's energy transition path and the true scale of its poverty landscape.

But we also – as usual – take a detailed look into the latest macroeconomic data. And in that context, there is one important announcement, namely that we decided to cut our projection for Indonesia’s economic growth in (full-year) 2025 from 5.0 percent year-on-year (y/y) to 4.9 percent (y/y), with the main reason being that Indonesia’s latest macroeconomic data are not showing great outcomes, overall.

This is the introduction to the June 2025 report. Want to order the whole report? The report (an electronic report, PDF, in English) can be ordered by contacting us through email and/or WhatsApp:

- info@indonesia-investments.com
- +62(0)882.9875.1125

Price of this report:

Rp 150,000 (or equivalent in other currencies)

Take a glance inside the report here!