Jakarta, 10 May 2013

MINISTRY OF ENERGY AND MINERAL RESOURCES OF THE REPUBLIC OF INDONESIA

DIRECTORAT GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION

By

Director of Various New and Renewable Energy T

I. Background 3 II. Legal Basis 4 III. Power Purchase Principle 5 IV. Purchase Price and criterion 6 V. Quota Bidding Mechanism 7 VI. Public Bidding Procedure 8 VII. Quota Determination Procedure 9 VIII. Requirement for Public Bidding on Quota Capacity 10 IX. Right of Business Entities (enterprise) of the Quota Bidding

Participant 13 X. Liability of Business Entities of Quota Bidding Winner 14 XI. Sanction of Business Entities of Quota Bidding Winner 15

I. BACKGROUND

1. For interconnection system, prioritized for substitution of electricity generation using fuel, which in turn can reduce the fuel subsidy;

2. For isolated systems, its development is directed to systems that still use diesel power plants;

3. Government budget is limited so it is necessary to increase the role of private sector in renewable energy, including solar;

4. To attract the necessary investment benchmark price for providing price certainty without negotiation;

5. Accomplishments of energy mix target should be driven

II. LEGAL BASIS

1. Law Number 30 year 2007 on Energy Article 20 Paragraph 5 Energy supply of new energy sources and renewable energy sources by business entities, permanent and individual establishment may obtain facilities and / or incentives from the Government and/ or the local government in accordance with the authority for a specified period to achieve its economic value.

2. President Regulation No. 5 Year 2006 concerning National Energy Policy is targeting contribution of new renewable energy amounted to 17% in the energy mix primer (until today share of NRE 6.9%).

3. Commitment of The Government for lower gas emissions CO2 by 26% by 2020 or 41% with international support.

III. PRINCIPLES OF POWER PURCHASE

1. PT PLN (Persero) is obliged to purchase all electricity generated from solar photovoltaic Enterprises (IPP).

2. Purchase price of electricity used in the power purchase agreement of solar Photovoltaics are final.

3. Purchase of electricity from solar photovoltaic capacity based on supply quotas set by DGNREEC which proposed by PT. PLN (Persero).

IV. PURCHASE PRICE AND CRITERION

1. Purchase price of electricity from solar photovoltaic for all capacity assigned with the highest standard price of 25 cents USD / kWh

2. If the use of photovoltaic solar modules with DCL at least 40%, given the incentives so that the purchase price of electricity is set to the highest standard price of 30 cents USD / kWh.

3. The purchase price includes the full cost of the interconnection of generation to the point of interconnection of electric power networks PT. PLN (Ltd.).

4. Criteria in determining quotas and the location is the burden and the ability of PLN system to absorb on-grid solar power production with a capacity of between 1-10 MW and location of isolated sub-system, which is still partly or wholly supplied from diesel-oil sub-systems and BPP on the above price Highest Purchase Price in MEMR design.

V. QUOTA BIDDINGMECHANISM

1. Director general of DGNREEC offer Quota capacity to Entity in accordance with the determination of quotas Capacity

2. Quota offer capacity conducted through a public tender.

3. When offering Quota capacity , there is 1 (one) Enterprises that register, then the period of the auction is extended for 7 working days.

4. When the extension of the auction has ended and still followed by 1 Enterprises, the tender process continued

VI. PUBLIC BIDDING PROCEDURE

1. Capacity auction quota can be followed by a Business Entity. 2. In 1 package auction, 1 Enterprises can only participate in one

consortium. 3. Bid Documents must be uploaded (up load) through the auction

website application electronically quota capacity. 4. Bid Documents uploaded (up load) in phase 1 consisting of two

covers, which cover 1 contains the requirements for administrative, technical, and financial, and the cover 2 contains price quotation.

5. Bid evaluation using the threshold scoring system and the lowest price.

6. Lowest price is the selling price of electricity is the lowest offered by the participants, expressed in U.S. $ cents / kWh.

VII. QUOTA DETERMINATION PROCEDURE

1. DGNREEC deliver massive capacity quota plan to PT PLN (Persero).

2. PT. PLN propose details quota capacity to DG of DGNREEC , no later than 60 days after the amount capacity quota delivered.

3. DGNREEC sets quota by considering the capacity of the proposed details of quota capacity at the beginning of the year.

VIII. REQUIREMENT FOR PUBLIC BIDDING ON

QUOTA CAPACITY ......... (1)

1. Enterprises can follow the auction process must meet the requirements Quota Capacity administrative, technical, and financial.

2. Administrative requirements include at least: a. integrity fact; b. identity of the applicant / certificate of incorporation Enterprises; c. profile of the enterprise; Taxpayer Identification Number; d. Partnership Agreement / Joint Operation, when it is in a form of consortium

3. Minimum financial requirements include: a. financial statements audited by a public accountant unless the new company by attaching the financial statements; b. Bid Security in the form of a bank guarantee of 2% (two percent) of the total investment value of state-owned banks or the major banks (prime bank) based in Jakarta; c. affidavit with the ability to open an account (escrow account) between the Enterprises and DGNREEC at 20% of total development Photovoltaics PLTS investment later than 15 working days after adoption as the preferred bidder by DG of DGNREEC

VIII. REQUIREMENT FOR PUBLIC BIDDING

ON QUOTA CAPACITY .........(2) 4. Minimum technical requirements include:

a. construction site plan that took into account the technical requirements of

connection that comes with the map and the coordinates of its location; b. implementation schedule for the construction of solar photovoltaic and

scheduled Commercial Operation Date (COD) of PLTS Photovoltaics; c. projected production and sale of electricity for 20 years; d. work plan and budget; e. Detailed Design Build (Detailed Engineering Design) solar photovoltaic; f. list of experts in the field of solar photovoltaic, especially those who have

the technical capability of operational solar photovoltaic with demonstrated experience in the field of solar photovoltaic development;

g. organizational structure of the implementation of development; h. Technical specifications of solar Photovoltaics (solar module capacity and

type); i. letters of support for the manufacturer of photovoltaic modules and

inverters;

VIII. REQUIREMENT FOR PUBLIC BIDDING ON QUOTA CAPACITY .........(3)

j. When using an imported product must attach a statement that the photovoltaic module and inverter imported used meets international standards as evidenced by a certificate of product certification agency independent

k. when using domestic products must attach: Recapitulation Form for the whole solar photovoltaic; a statement that the photovoltaic modules and inverters

domestic products used in compliance with the applicable technical standards in Indonesia, as evidenced by a certificate of product test results from testing agencies,

and statement using domestic products to components other than the main component that meets national standards.

IX. RIGHTS OF BUSINESS ENTITIES OF THE

QUOTA BIDDERS

1. In 1 package of auction, 1 Enterprises can only participate in one consortium.

2. Auction participants registering from the date of announcement of the auction up to at least 1 day before the deadline for uploading the Bid Document.

3. Auction participants after registration Tender documents can be downloaded from the date of registration up to 1 day before the deadline for uploading the Bid Document.

4. Participants who entered the Bidding Documents may submit a written rebuttal over the announcement of the winning bidder to DGNREEC within 5 working days after the announcement of the winner of the auction accompanied by evidence of irregularities.

5. An objection may be brought by the participants either individually or jointly with other participants in case of deviation procedures.

X. LIABILITY OF BUSINESS ENTITIES OF QUOTA BIDDING WINNER

1. auction winners Entity must deposit funds for Photovoltaic solar development implementation on behalf of the Enterprise and DGNREEC on state-owned banks or the major banks (prime bank) located in Jakarta by 20% of the total investment of solar photovoltaic development, no later than 15 working days after named the winner of the auction by DGNREEC.

2. The entity (Enterprises) can use the deposited funds for the construction of solar photovoltaic investments needs after reaching financial close.

3. PT. PLN (Persero) within a maximum period of 60 days after the assignment of the purchase of electricity required to sign a PPA and report on its implementation to the DGNREEC .

4. Enterprises tender winner shall achieve financial close within a maximum period of 3 months after the signing of the PPA.

5. Enterprises shall open the auction winner of Solar Photovoltaics development later than 3 months after financial close.

XI. SANCTION FOR BUSINESS ENTITIES OF QUOTA BIDDING WINNER

1. The entities or enterprises as the auction winner that can not fulfill its obligations, subject to administrative sanctions include written warnings.

2. Given a written warning by DGNREEC most 3 times the warning period 1 (one) month respectively.

3. Given a written warning by the proposed PT. PLN (Persero) or based on an evaluation by DGNREEC.

4. Enterprises as an auction winners received a written warning penalty after expiry of the three written warnings not perform its obligations, then the assignment to the PT. PLN canceled by the Minister on the recommendation of DGNREEC.

5. When the assignment to the PT. PLN canceled by the Minister then the PPA is terminated, and Director General (DG) of DGNREEC propose to the Director General of Electricity (DGE) to establish purchase assignment of power to a new state electricity company (Ltd.)

DESIGN IMPLEMENTATION MECHANISM OF MINISTER REGULATION OF PHOTOVOLTAIC SOLAR POWER PLANT

PROVISION

PPA + Financial Close

CONSTRUCTION

DGNREEC PLN

PLN DEVELOPER

DEVELOPER

Solar PP Quota Bidding: 1. DGNREEC submit Quota to PLN 2. President Director of PLN propose

detail quota to DGNREEC 3. DGNREEC Sets the proposal of detail

quota

Public Bidding: 1.Announcement, Registration, Explanation Socialization, Submission of Bidding Document 2.Evaluation of Bidding document 3.Proffing 4.Winner determination 5.Objection Period

Assignment for Purchasing: 1.DGNREEC submits the winner to DGE 2.Minister issues letter of assignment to PLN 3.Business Entity/enterprise deposit fund for Solar PP development 4.Signing on Sale Agreement 5.Financial Close 6.Period of the Working start

Construction implementation Period 540 days / 18 month

Commercial Operation Date (COD) 890 days / ± 30 months

CYCLE OF IMPLEMENTATION OF MINISTER

REGULATION ON SOLAR POWER

Start

64 days

46 days

asap

asap

asap Max 60 days

Max 90 days

Max 90 days

Remark

Extension period of the construction

implementation max 12 months

Go Green Indonesia ! energi hijau, energi masa depan

www.ebtke.esdm.go.id

Jalan Jenderal Gatot Subroto, Kav. 49 Jakarta 12950; Telp/Faks : 021-5250575

KEMENTERIAN ENERGI DAN SUMBER DAYA MINERAL REPUBLIK INDONESIA

DIREKTORAT JENDERAL ENERGI BARU, TERBARUKAN, DAN KONSERVASI ENERGI

Terima Kasih