Indonesia to relax foreign ownership restrictions for businesses, incl. geothermal

Drill site at Muara Laboh project, West Java/ Indonesia (source: ENGIE)
Alexander Richter Alexander Richter 27 Nov 2018

The Government of Indonesia has announced efforts to attract foreign direct investment by relaxing restrictions on foreign ownership in selected business sectors. While not as dramatic for the geothermal sector, there are elements being changed.

Earlier this month, the Indonesian Government announced efforts to relax restrictions on foreign direct investment in selected business sectors. With this the government hopes to attract further foreign investment. Foreign direct investment can now reach up to 100% in 54 business sectors.

For geothermal energy, there will be no change in respect to ownership of geothermal power generation of up to 10 MW (the maximum FDI lies at 67%). For the energy and natural resources sector, Mondaq reports the following FDI limitations:

  • Geothermal drilling services – 95%
  • Oil and gas construction services – platforms – 75%
  • Geothermal operating and maintenance services – 90%
  • Power generation beyond 10 MW – general 95%, PPP 100% during concession period
  • Geothermal surveying services – 95%
  • Testing and analysis of electrical installation of high/ extra-high voltage electrical power generating and utility installation a- 49%

For details and other business sector’s FDI allocations, see link below.

Source: Mondaq