INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Serafina Muryanti, Adya Sepasthika and Kenny Poltak, ABNR Counsellors at Law
• For a non-geothermal power plant, any transfer of shares in power generation companies before a commercial operation date must be initially approved by PLN, and in any case the shares can only be transferred to the subsidiary of the trans - ferring shareholder, which owns more than 90%. Subsequently, power generation companies must notify the MEMR no later than five business days after the date on which the Ministry of Law and Human Rights (MOLHR) provides approval/receipt of notification for the change of shareholding. • For a geothermal power plant, power generation companies may transfer their shares on Indone- sia’s stock exchange once the exploration phase is complete, and must obtain approval from the MEMR prior to the initial public offering (IPO) or the transfer of share ownership being recorded on the stock exchange. MEMR approval is also required before any secondary rights are issued. It is unclear whether the restriction on the transfer of shares during the exploration phase applies to private sales. However, in practice – and in the view of the Directorate General of New, Renewable Energy and Energy Conservation of the MEMR – geothermal power generation companies can privately transfer their shares during the exploration and exploita- tion phases. The requirement to notify the MEMR no later than five business days after the date the MOLHR provides approval/receipt of notification for the change in shareholding is also applicable in this case. Other than the aforementioned restrictions, amal- gamations and mergers and the transfer of shares that constitute an acquisition, are also subject to the requirements under Law No 40 of 2007 on Limited Liability Companies, as amended by Law 6/2023, as follows. • It must be announced in at least one daily Indo- nesian newspaper with national circulation, and in writing to the employees of the company that is going to enter a merger or amalgamation, or is being acquired. • The amalgamation, merger or acquisition (including the merger/acquisition plan) must be approved by the general meeting of shareholders, which must be attended by at least three-quarters of the total
amount of voting shares. The resolution is valid if it is approved by at least three-quarters of the total amount of votes cast, unless the articles of asso- ciation of the relevant company provide greater quorum for attendance and voting. • The articles of association of the surviving com- pany will only become effective once approved by the MOLHR. • The board of directors of the surviving company must announce the consummation of the merger, amalgamation or acquisition in at least one daily Indonesian newspaper with national circulation after the effective date of the merger, amalgama- tion or acquisition. There are no minimum requirements under the regula- tions that must be satisfied by a purchaser of assets or an acquirer of a business, such as financial metrics and industry expertise. 1.5 Central Planning Authorities The central authority that oversees and administers the electricity supply, the development of the electric- ity supply, distribution facilities and the development of transmission facilities is the MEMR. The MEMR’s roles and powers include: • issuing regulations covering, among other things, licences and approvals, as well as safety and technical standards related to the construction and operation of power generation, transmission and distribution systems; and • issuing permits such as a business licence and Worthiness Certificate ( Sertifikat Laik Operasi ; SLO). 1.6 Recent Changes in Law or Regulation In line with PR 112/2022, the MEMR has introduced a new regulation, namely MEMR Regulation No 5 of 2025 on the Guidelines for PPA from Power Plants Utilizing Renewable Energy Sources (MEMR 5/2025), which revoked the previous ministerial regulation on PPA (Regulation No 10 of 2017, as amended) to the extent it governs renewable energy PPAs. MEMR 5/2025 offers updated guidelines for renewable ener- gy PPAs, adapting existing PPA practices to current market conditions. MEMR 5/2025 regulates, among other things:
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