MENTARI - Contributions to the JETP

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Support for the JETP IFA with a detailed focus on accelerating Indonesia’s energy transition.

General Information

DESCRIPTION

About MENTARI

MENTARI (Menuju Transisi Energi Rendah Karbon) is a government-to-government (G2G) bilateral cooperation between Indonesia and the United Kingdom. Launched on 6 January 2020, the programme is designed to support Indonesia’s energy transition by promoting low-carbon energy, fostering inclusive economic growth, and reducing poverty.

Originally planned as a four-year initiative, MENTARI has been extended to run until July 2025. Led by the British Embassy in Jakarta and implemented by PT Palladium International Indonesia in consortium with Castlerock Consulting and Hivos, the programme operates through four interlinked strands—policy, brokerage, demonstration projects, and networking—with gender and inclusion integrated throughout. MENTARI plays a key role in supporting Indonesia’s move towards a more sustainable energy future.

As part of this programme, MENTARI also directly and indirectly supports Indonesia’s energy transition under the JETP framework by addressing key areas of technical assistance, policy research, and strategic coordination. Key areas of the project include:

  • Technical Assistance for Off-Grid Renewable Energy: Supporting MEMR and PLN with technical assistance for off-grid renewable energy systems and diesel replacement initiatives through DRP Phase I (since December 2022) and the upcoming DRP Phase II (starting December 2023).
  • Policy and Technical Analysis: Conducting studies to strengthen local supply chains and define clear local content requirements for solar power, along with complementary technical and economic analyses. • Technical Assistance for Renewable Energy Investment: Providing technical assistance and matchmaking for renewable energy investments and projects.
  • Facilitation and Coordination: Organising regional meetings and planning sessions to ensure effective stakeholder collaboration and smooth project implementation.

 

Specific focus

Support for the JETP IFA with a detailed focus on accelerating Indonesia’s energy transition. This includes:

  • Ongoing technical assistance to support off-grid renewable energy business models and the diesel replacement programme through DRP Phase I and Phase II.
  • Comprehensive policy studies on supply chain and domestic industry support, with a specific focus on regulating local content requirements (LCR/TKDN) for solar power generation systems.
  • Providing quantitative analysis and strategic planning (New Paradigm Planning) to support renewable energy integration and the coal phase-out.

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KEY DELIVERABLES

1. Technical Assistance to DRP Phase I and II

  • Continuous support and dialogue with MEMR and PLN to implement an off-grid renewable energy business model and a diesel replacement programme for more than 300 sites, enabling potential large-scale deployment of renewable energy.

2. Policy Studies on Supply Chain and Domestic Industry Support

  • Development of policy studies for regulating Local Content Requirements (LCRs/TKDN) for solar power generation systems, including:
    • Analysis of LCRs for solar modules and other technologies – A detailed technical review supporting the policy studies.
    • Cost-Benefit Analyses – “RUPTL Case: Analysis of imposing LCRs on solar modules in the electricity sector” and “JETP CIPP Case: A similar cost-benefit analysis tailored for the JETP CIPP framework.”
    • LCRs study using the Social Accounting Matrix (SAM) method – Assessing the economic implications of renewable energy deployment within the solar PV supply chain.
  • Support for policy development on MEMR and Ministry of Industry regulations concerning LCRs, including:
    1. MEMR Ministerial Regulation No. 11/2024
    2. Ministerial Decree No. 191/2024
    3. Directorate General Regulation No. 150/2024
    4. MOI Ministerial Regulation No. 33/2024 (repealing MOI Ministerial Regulation No. 54/2012 on electricity infrastructure)
    5. MOI Ministerial Regulation No. 34/2024 (setting LCR provisions for PV module products)
  • Quantitative Analysis of Renewable Energy Integration and Coal Phase-Out Plans – Data-driven insights to support strategic decision-making for the energy transition.
    • New Paradigm Planning – Scenario planning and capacity building (including training-of-trainers) to identify innovative pathways for Indonesia’s sustainable energy future.
    • New Paradigm Operations – Improved dispatching to support the integration of VRE (Variable Renewable Energy), including introducing Ancillary Services in Indonesia. With increasing VRE penetration, there is an opportunity to integrate Ancillary Services into Power Purchase Agreements (PPAs) to incentivize providers and ensure reliability. PLN has responded positively to this support, anticipating future renewable energy integration with the main grid.
    • Support for Power Purchase Agreement (PPA) formulation – Assisting in developing PPAs for renewable energy, including VRE and hybrid projects.
    • Input to JETP CIPP Chapter 8.1 – Strengthening the domestic renewable energy supply chain by reforming LCRs, particularly following the latest MEMR and MoI regulations.

3. Support for Advancing Indonesia’s Hydrogen Energy

Following support for developing the National Hydrogen Strategy, MENTARI contributed to:

  • Technical and Environmental Guidelines for Hydrogen Refueling Stations.
  • Hydrogen Standard Classification of Business Fields (Klasifikasi Baku Lapangan Usaha Indonesia – KBLI).

4. Support for Off-Grid Electrification

  • Regional Energy Planning Support for East Nusa Tenggara – Contributing to regional economic development through a just energy transition by incorporating GEDSI principles.
  • Development of a Blueprint for Rural Electrification – Incorporating best practices and lessons learned from the MENTARI Demonstration Project.

5. Support for Renewable Energy Innovative Financing

  • Establishing a Trust Fund under PT SMI – Pooling donor funds for grants, concessional finance, and technical assistance. The Trust Fund aims to simplify and accelerate the allocation of development funds for financing green infrastructure in Indonesia.
  • MoU between PT SMI and MENTARI – Signed during ADFIAP in Bali in November 2024 for Trust Fund development.

6. Technical Assistance for New and Renewable Energy Projects

  • Provided technical assistance for multiple renewable energy projects, including pre-feasibility studies, feasibility studies, and feedstock assessments. Covered projects include hybrid systems (e.g., solar-hydro), grid-connected hydropower, and emerging technologies such as hydrogen, biomass, and tidal power.
  • Integrated Gender Equality and Social Inclusion (GESI) by providing capacity-building support to ensure clean energy benefits reach women and marginalized groups.
  • Matchmaking support for renewable energy projects spanning hydro, solar PV, biomass, and hybrid technologies.

7. Support for MEMR Reorganisation Study

  • At MEMR’s request, MENTARI supported a study on the structural reorganization of the Directorate of New Energy, Renewable Energy, and Energy Conservation to enhance flexibility and capacity for implementing the energy transition.

8. Capacity Building and Sustainability of Renewable Energy Skills

  • HOMER Pro Training of Trainers (ToT) – Training trainers from PPSDM KEBTKE, PLN, PERTAMINA, PEM AKAMIGAS, and PEP (Politeknik Energi dan Pertambangan) Bandung to equip them to train new energy modelers in Indonesia.
  • HOMER Pro Massive Open Online Course (MOOC) – MENTARI completed the transfer of the HOMER Pro MOOC to MEMR’s learning management system, ensuring accessibility for renewable energy modelers and practitioners across Indonesia.
IPG Country / Entity
UK
Beneficiary
Ministry of Energy and Mineral Resources (MEMR)
Implementing Partner
Palladium International, Castlerock, Hivos, and ECA
Specific Focus
Support for the JETP IFA focuses on accelerating Indonesia’s energy transition by providing technical assistance for off-grid renewable energy and diesel replacement (DRP Phase I & II), conducting policy studies on supply chain and local content requirements (LCR/TKDN) for solar power, and delivering quantitative analysis and strategic planning for renewable integration and coal phase-out.
Commited Amount (Home Currency)
GBP
2,800,000
Commited Amount (USD)
USD
3,400,000
Financial Information
USD
3,400,000
Description
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Modality Financing Type Financing Source Financing Intermediary Amount (Home Currency) Amount (USD) Part of JETP Pledge
Modality A Grant / TA IPG - United Kingdom Foreign, Commonwealth & Development Office (FCDO) GBP 2,800,000 USD 3,400,000 Yes