On 10 October 2025, the President enacted Presidential Regulation (“PR”) No. 109 of 2025 on the Handling of Urban Waste through Waste Processing into Renewable Energy Based on Environmentally Friendly Technology (“PR 109/2025”), which revokes the preceding regulation, namely PR No. 35 of 2018 on the Acceleration of the Construction of Waste-to-Energy Power Plants Based on Environmentally Friendly Technology (“PR 35/2018”), which was considered to have faced challenges in its implementation.
The issuance of PR 109/2025 were introduced for the purpose of increasing waste generation in Indonesia. According to data from the National Waste Management Information System (Sistem Informasi Pengelolaan Sampah Nasional or SIPSN), Indonesia generated approximately 56.63 million tons of waste in 2023, of which only 39.01% was properly managed, while the remainder was not managed properly and was largely disposed of through open dumping and other improper disposal practices.[1]
One of the principal features of PR 109/2025 is the introduction of Waste Processing into Renewable Energy Based on Environmentally Friendly Technology (Pengolahan Sampah Menjadi Energi Terbarukan Berbasis Teknologi Ramah Lingkungan), namely waste processing using machinery and/or equipment capable of converting waste into electricity, bioenergy, renewable fuels, and other by-products.
Within this framework, PR 209/2025 specifically regulates Waste Processing Based on Environmentally Friendly Technology into Electrical Energy (Pengolahan Sampah Berbasis Teknologi Ramah Lingkungan menjadi Energi Listrik or “PSEL”), which forms the basis for the development of waste-to-energy power plants (Pembangkit Listrik Tenaga Sampah).
For further context, the following outlines several key aspects relevant to the development of PSEL under PR 109/2025:
Eligibility Criteria of Cities Carrying Out PSEL
PR 109/205 adopts a different approach from the previous regime under PR 35/2018. Rather than designating specific regions, PR 109/2025 establishes general eligibility criteria for regencies or cities intending to implement PSEL project.
Pursuant to Article 4 (1) of PR 109/2025, such criteria are as follows:
- availability of waste volume supplied by the regional government to the PSEL facility of at least 1,000 tons/day during the PSEL operational period;
- availability of the regional budget (Anggaran Pendapatan dan Belanja Daerah) allocated for waste management, including the collection and transportation of waste from waste sources to the PSEL location;
- availability of land for waste management and PSEL development; and
- commitment to prepare regional regulations regarding retribution for cleaning service.
(collectively, the “Regional Criteria”).
In line with these requirements, the regional government must submit a statement of readiness for PSEL development, which shall be accompanied by:
- fulfilment of the Regional Criteria;
- integration of PSEL development into regional planning documents and waste master plans; and
- conducting public consultations with communities surrounding the proposed PSEL location.
(Article 8 (1) of PR 109/2025)
Once the regional government has submitted its readiness to carry out the PSEL project, the Minister of Environment/the Head of Environmental Control Agency together with the Minister of Domestic Affairs, will determine the eligible regencies or cities, and such determination must be conveyed to the Daya Anagata Nusantara Investment Management Agency (“BPI Danantara”) (Article 13 of PR 109/2025).
Role of BPI Danantara
PR 109/2025 mandates BPI Danantara a central role in facilitating the implementation of PSEL development through its investment holding, operational holding, and/or State-Owned Enterprises (Badan Usaha Milik Negara or “BUMN”) and/or subsidiaries of BUMN. Pursuant to Article 5 of PR 109/2025, BPI Danantara has 2 principal roles, namely:
- to conduct the selection of the Business Entity for PSEL Development and Management (Badan Usaha Pengembang dan Pengelola PSEL or “BUPP PSEL”); and/or
- to undertake investment in PSEL projects that are commercially and financially feasible, as well as feasible from a risk management perspective.
Due to the stipulation of BPI Danantara’s role through this regulation, BPI Danatara recently announced in March 2026, that it has selected partnership with 2 (two) Chinese companies, Wangneng Environment Co., Ltd. and Zhejiang Weiming Environment Protection Co., Ltd. as its partner in establishing a power generator plant in Bekasi, West Java, and Denpasar, Bali.
Selection of BUPP PSEL
A BUPP PSEL intending to plan, develop, and implement the PSEL must satisfy several requirements, which include:
- possessing tested and up-to-date PSEL technology which is compatible with environmentally friendly technological developments and the type of waste to be processed;
- being financially capable and able to fulfil its investment obligations; and
- having experience in PSE and complying with all applicable provisions and standards.
(Article 15 (1) of PR 109/2025)
In certain circumstances, the selection of BUPP PSEL may be carried out through direct appointment instead of an open selection process. These circumstances include:
- where only one participant meets the above criteria;
- where the location meets the condition of a waste emergency requiring immediate handling and is so determined by the MoE; and/or
- there a PSEL developer had already been designated by the regional government prior to the entry into force of PR 109/2025 and such designation has subsequently been terminated in a manner that is final and binding.
(Article 15 (2) and (3) of PR 109/2025)
Once selected, the BUPP PSEL must fulfil the relevant licensing requirements as part of the PSEL development stages. Such licensing is processed electronically through the Online Single Submission System.
Electricity Offtake and PJBL Framework
In addition to the applicable licensing requirements, the operational implementation of PSEL also requires the execution of an Electricity Sale and Purchase Agreement (Perjanjian Jual Beli Tenaga Listrik or “PJBL”) between PT PLN (Persero) (“PLN”) and the BUPP PSEL. Article 19 (1) of PR 109/2025 provides that the PJBL governs PLN’s purchase of electricity from the BUPP PSEL, while Article 19 (2) provides that the electricity purchase price by PLN is set at USD 0.20 per kWh for all capacities.
The PJBL must be executed by PLN no later than 10 working days after the BUPP PSEL has fulfilled its licensing requirements, particularly the obligation during pre-construction phases. The PJBL remains effective for a period of 30 years from the commercial operation date of the PSEL facility, and the proceeds from electricity sales under the PJBL constitute the right of the BUPP PSEL (Article 19 (7), (8) and (9) of PT 109/2025).
Concluding Remarks
PR 109/2025 marks an important development in Indonesia’s regulatory approach to urban waste management by placing waste processing into renewable energy within a more integrated legal and institutional framework. As reflected in its provisions, the regulation does not address only the technical conversion of waste into energy, but also the broader preconditions for project implementation, including regional readiness, land and budgetary support, institutional involvement by BPI Danantara, participation by business entities through BUPP PSEL, and the contractual arrangement for electricity offtake by PLN.
In that sense, PR 109/2025 may be read as an effort to position waste-to-energy development not merely as a matter of waste disposal or power generation in isolation, but as a coordinated public policy mechanism that operates across environmental, infrastructural, investment, and regional governance considerations. At the same time, the practical operation of the framework introduced by PR 109/2025 will necessarily depend on how the relevant stakeholders implement the regulatory requirements and coordinate across the various stages of project development.
[1] Ministry of Environment/Environmental Control Agency, “KLH-BPLH Tegaskan Arah Baru Menuju Indonesia Bebas Sampah 2029 dalam Rakornas Pengelolaan Sampah 2025”, Website of Ministry of Environment/Environmental Control Agency, 22 June 2026, https://www.kemenlh.go.id/news/detail/klh-bplh-tegaskan-arah-baru-menuju-indonesia-bebas-sampah-2029-dalam-rakornas-pengelolaan-sampah-2025 (accessed on 14 April 2026).
Disclaimer: The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their circumstances.
