The Ministry of Energy and Mineral Resources (MEMR) has issued Regulation No. 5 of 2025 (MEMR Reg 5/2025) to enhance legal certainty and standardize Power Purchase Agreements (PPAs) for renewable energy projects. Covering geothermal, hydro, solar, wind, biomass, and waste-to-energy, it builds on Presidential Regulation No. 112 of 2022 to attract investment and streamline project execution.

Key updates include PPA extension clarifications, prioritization of domestic products, and recognition of carbon credits. It also redefines force majeure, refines risk allocation, and introduces refinancing options for financial flexibility. The regulation maintains the Build-Own-Operate (BOO) model while allowing Build-Own-Operate-Transfer (BOOT) for added flexibility.

MEMR Reg 5/2025 also strengthens pricing mechanisms, dispute resolution, and termination clauses, ensuring a smoother transition to renewable energy in Indonesia while ensuring financial and operational stability for all stakeholders.

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