Home Blog Indonesia’s Rapid Development for the Green Energy Transition Business Setup | Company Registration Indonesia’s Rapid Development for the Green Energy Transition InCorp Editorial Team 4 June 2025 4 minutes reading time Table of Contents The Difference Between Clean and Green Energy Green Energy Transition and Leaving Coal Behind Mining Companies Seek Alternatives Any form of energy produced from renewable resources, such as sunlight, wind, or water, is called green energy. It frequently comes from renewable energy sources, although there are essential distinctions between renewable and green energy, which we will discuss below. The Difference Between Clean and Green Energy Renewable energy methods like solar energy, wind power, geothermal energy, biomass, and hydroelectric power are familiar sources of green energy. Each of these technologies operates uniquely, whether by harnessing the sun’s energy, as with solar panels, or employing wind turbines, water flow, or both to produce energy. To be categorized as green energy, a resource must not cause pollution, as is the case with fossil fuels. Accordingly, not all of the sources employed by the renewable energy sector are environmentally friendly. For instance, while burning organic material from sustainably managed forests may be renewable, the CO2 emissions from the burning process make the process not environmentally friendly. Unlike fossil fuels like coal or natural gas, which may take millions of years to form, green energy sources are typically supplied by nature. Green sources frequently avoid environmentally harmful mining and drilling operations. Green Energy Transition and Leaving Coal Behind As countries are getting increasingly conscious about their carbon footprint, there has been an apparent attempt by a large number of countries to transition away from the usage of coal towards a greener, more sustainable source of energy. Regarding bilateral cooperation, Germany started the Green Infrastructure Initiative (GII) to support Indonesia’s efforts toward the green energy transition. The GII focuses on managing water and wastewater, managing solid waste, and urban public transportation. Jokowi wants to make East Kalimantan’s Nusantara a metropolis where most people use public transport. The building of Nusantara, which will be effectively replacing Jakarta, is aimed to be sustainable and green. The government will use renewable energy sources to power the city. By 2060, Indonesia promises to have zero emissions. Climate Investment Funds (CIF) has agreed to collaborate with the government-owned utility Perusahaan Listrik Negara (PLN) to convert coal facilities to use solar power and battery storage. PLN has promised to stop developing new coal-fired power plants starting in 2019 and phase them out by 2056. The plan also encourages policy changes to decommission other coal assets, roll out 400 MW of installed renewable energy generation, and reclaim 150 hectares of coal mines. Its implementation will be assisted by the World Bank and the Asian Development Bank. With the plan already laid out, Indonesia offers a good investment scene. Aside from that, the US and Japan are currently negotiating a multi-billion dollar package with the Indonesian government to help the country shift away from coal. According to secret diplomatic service reports of the EU that Politico has seen, they made an initial USD 10 billion offer. Challenges For Coal Power Plant Industry The government must overcome many obstacles in the development of EBT. Most of the hiccups include the potential for the green energy transition to spread across the nation. Network restrictions, the requirement for large base load or storage power plants, limited domestic industry capabilities, market uncertainty, transportation, and a decrease in energy consumption due to the pandemic are impairing the development. The most significant problem with the transition, though, is financial. These include initial investment expenses, high bank interest rates, and a lack of desire for banks to invest. Those problems are responsible for slowing down the financing process. Additionally, developing nations continue to pay a high price for clean energy technology and the energy transformation process. Mining Companies Seek Alternatives The introduction of renewable energy and the creation of an EV ecosystem in Indonesia are the stated objectives of Indika Energy. On September 22, PT Mitra Motor Group (MMG), a subsidiary of Indika Energy and a manufacturer of electric four-wheelers, established a joint venture with Foxteq Corporation Singapore. The business partnership, which concentrated on producing commercial electric vehicles and batteries, was followed by an investment from MMG of IDR 39 billion (USD 2.5 million), or 60% of the paid-up capital. By purchasing the bauxite miner PT Perkasa Investama Mineral for USD 5 million through its subsidiary PT Indika Mineral Investindo, publicly traded coal miner PT Indika Energy has completed a drive to diversify its business away from coal. Presently, Indika owns all of the business. In particular, the mining and processing of bauxite minerals was one area where they sought to diversify their business away from the coal industry. The energy transition is a momentum worth taking a risk. As all countries are racing to reduce emission levels, businesses may maximize their profits and benefit from this common goal. Companies seeking to do so in Indonesia may contact InCorp Indonesia (an Ascentium Company) for company registration and business license matters. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions How A PMA company can be eligible to conduct import activities? What licenses and procedures are necessary while engaging in import-related activities? A PMA company in Indonesia must obtain an NIB, which also functions as: Importer Identification Number (Angka Pengenal Impor or API) Producer Importer Identification Number (Angka Pengenal Impor Produsen or API-P), which is required for the import of machinery and equipment, goods, and materials used in production. General Importer Identification Number (Angka Pengenal Impor Umum or API-U), which is required for the import of specific goods for trading purposes, is grouped under one section in the Customs Classification System. Customs Identification Number (Nomor Identitas Kepabeanan or NIK), It functions as an identifying document for the applicable Customs and Excise authorities during the customs clearance process. Some goods may face limitations or restrictions on importation in Indonesia, potentially requiring additional approval from the Ministry of Trade. Recommendations from technical ministries like Industry or Agriculture may influence these approvals. What responsibilities does a PMA company have in terms of non-tax compliance? In Indonesia, a PMA company is typically required to submit various reports to relevant authorities, such as: Annual financial report Investment realisation report Manpower and employee welfare report Expatriate utilisation report Company loan repot Foreign exchange and prudential principles report However, depending on the business activities and classification relevant authority may require additional reports from a PMA company. How much is the minimum fund required to establish a PT PMA business in Indonesia? The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location. Will the government check the minimum paid-up capital for doing business in Indonesia? The government will check the minimum paid-up capital, IDR 10,000,000,000. Fulfilling this requirement is a must. Get in touch with us. 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