Risk-based Analysis is Done to Facilitate Opening of Electricity Business and Create Certainty, Says Official

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 385.Pers/04/SJI/2021

Date: 28 October 2021

Risk-based Analysis is Done to Facilitate Opening of Electricity Business and Create Certainty, Says Official

The Ministry of Energy and Mineral Resources (EMR) has continued to increase investment in the electricity subsector by accelerating and facilitating business licensing. One of the efforts made is to adopt a risk-based business licensing policy as set out in Government Regulation (GR) Number 5 of 2021 on the Implementation of Risk-Based Business Licensing.

"Every state ministry/agency analyzes and determines the level of business risk, namely Low, Medium, or High risk, to accelerate and facilitate the opening of businesses and create business certainty," said Secretary of Directorate General of Electricity of the Ministry of EMR, Munir Ahmad, in a webinar titled "Business Licensing for Electricity Supporting Services" held in Jakarta on Thursday (28/10).

Munir explained further that GR 5/2021 was a follow-up to Law Number 11 of 2020 on Job Creation. Based on GR 5/2021, the government uses a risk-based approach to establish business licenses for all business sectors, including the electricity subsector.

"With the enactment of this government regulation, every state ministry/agency and regional government uses norms, standards, procedures, and criteria with a risk-based approach," said Munir.

According to Munir, the electricity business is divided into two types, namely electricity supply business and electricity supporting services business. In the chapter on the Implementation of the Energy and Mineral Resources Sector of GR 25/2021, the scope of electricity supporting services business has been expanded to include state-owned enterprises (SOEs), regional government-owned enterprises, private businesses, public services agencies, and cooperatives.

To facilitate businesses to apply for electricity licenses and permits, all applications for business licenses and permits in the electricity subsector are submitted through the Online Single Submission (OSS) System for Risk-Based Business Licensing and must meet the standard requirements of the ESDM Licensing Application.

In this system, the Directorate General of Electricity verifies that an application meets technical requirements, and the verification forms the basis for license issuance. Because it is done online, a business entity can track its application status and will receive a notification about what needs to be completed or corrected if the application is rejected.

"We've made every effort to ensure that business actors do not experience significant obstacles when applying for business permits in the electricity subsector," said Munir.

On the same occasion, Director of Electrical Engineering and Environment, Wanhar, said that based on GR 25/2021, foreign businesses or individuals were allowed to run an electricity supporting service business by establishing a representative office.

"Foreign representative offices are allowed, but there are restrictions. They can only do three types of business, namely construction and installation, consultation, and maintenance," said Wanhar.

Wanhar added that foreign representative offices were only allowed to carry out high-cost electricity supporting services and were required to form a joint operation with domestic businesses. Based on GR 25/2021, an application for a license in electricity supporting services business by foreign representative offices will be subject to administrative fees, and the fees are treated as non-tax state revenues. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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