Financing Battery Energy Storage Systems in Indonesia

Indonesia’s Rencana Usaha Penyediaan Tenaga Listrik (RUPTL) 2025-2034, or Electricity Supply Business Plan, represents a concrete pathway towards achieving the country’s objectives to expand its power sector and integrate low-emissions generation. Within this framework, battery energy storage systems (BESS) are identified as critical elements of Indonesia’s future power grid. By strengthening system reliability and stability, facilitating the integration of variable renewable energy, and extending access to low-emissions electricity in isolated regions, BESS can offer essential services which will only become more valuable as Indonesia’s demand for electricity grows. However, deployment of the technology remains in its early stages in the country today, and meeting the RUPTL’s objectives will require both public and private actors to significantly scale-up investment.

Against this backdrop, Indonesia needs business models and financing structures that are adapted to its conditions. Constraints on spending by the country’s state-owned utility, PLN, mean that the private sector has the potential to play a significant role in the development of Indonesia’s BESS fleet. This report examines how private capital can be mobilised to accelerate BESS deployment across all regions of the country. Current risks associated with BESS development – especially from the perspective of project sponsors and financiers – are identified and addressed through adaptive business models. The analysis also identifies the level of investment needed to complete the RUPTL’s BESS pipeline and examines how this spending can be financed. Finally, the report takes a deep dive into the RUPTL by examining the bankability level of archetypal projects and quantifying how these projects can be remunerated.

By identifying the risks and opportunities associated with BESS development in Indonesia, this report aims to support policy makers, regulators, project investors and financiers in creating bankable conditions for the achievement of the RUPTL’s battery storage ambitions.