Phase 1 · Step 4 — Regulatory & Permitting Framework

Understanding memo on the Indonesia regulatory and permitting framework that enables the 3-SPV portfolio. Revised 2026-05-16.

1. What this regulatory framework provides

Indonesia's regulatory environment is structured to support this project class. Perpres 109/2025 — issued in 2025 to replace PR 35/2018 — mandates non-thermal anaerobic digestion for wet organic waste streams, placing the project squarely within the country's PSE Bioenergy + Renewable Fuels priority category. The project class exists because the regulator wanted it to.

Local government partnerships supply material in-kind contributions across all three SPVs:

• DKI Jakarta routes feedstock from 153 traditional markets through PD Pasarjaya, the regional state-owned enterprise (BUMD).
• Kota Bandung + DLH supply the full MRF in-kind (significant CAPEX reduction) and pay a 40% tipping-fee share on processed organic feedstock.
• Kab. Lampung Selatan supplies road infrastructure to the TPA Lubuk Kamal site as in-kind support.

The Omnibus Law (UU Cipta Kerja, 2020) consolidated federal-provincial-regency permitting through a single risk-based licensing system (Online Single Submission, OSS), reducing approval timelines across the layers. PMK 130/2020 provides a tax-holiday framework for qualifying renewable infrastructure investments — potentially 5 years at 100% for projects in the USD 10–15M CAPEX bracket — applicable to all three SPVs as bankable upside.

2. The supporting framework at a glance

Each framework row above is a project enabler. Perpres 109/2025 creates the regulatory market. PMK 130/2020 offers tax-holiday treatment. Omnibus Law's OSS smooths permitting. IPPKH is a routine forestry-use process for infrastructure on Perhutani land. The regency / kota partnerships deliver in-kind support that translates directly into CAPEX or OPEX savings.

3. The permitting structure that supports the project

Permits route through three layers, consolidated under the OSS single-window platform since 2020:

• Federal — Kementerian ESDM (energy & mineral resources), Kementerian LHK (environment & forestry, including IPPKH for Perhutani land), Kementerian PUPR (public works) where civils intersect federal infrastructure.
• Provincial — provincial DLH (environment & waste management), provincial energy bureau, provincial Bappeda for spatial planning alignment.
• Regency / Kota — Kabupaten / Kota DLH, BUMD partnership where applicable, regency Bappeda.

The Omnibus Law's OSS allows operators to submit a single application that routes to the relevant approving authorities by risk classification, reducing parallel-track filings and timeline. Renewable-energy infrastructure at the project's CAPEX scale qualifies for OSS streamlined processing.

Award process from MoU to Construction. Each SPV moves through ten sequential stages: Development → MoU (Memorandum of Understanding with the BUMD or regency) → FS (Feasibility Study) → LOI (Letter of Intent — a bilateral scope-and-ask document in which the regional government / BUMD states what it wants delivered and what in-kind / commercial contributions it will provide, and the SPV / sponsor states what it commits to deliver back in terms of scope, capex, timeline, and revenue terms; signed by both parties) → Award (formal Letter of Award authorising the SPV to develop) → Mobilization → FEED → Financial Close → Construction → COD. LOI is the single most important pre-award milestone — it locks the scope, the in-kind support package, and the revenue-share framework before the binding Award. Once Award is issued, mobilization / FEED / permit pre-clearances / equipment-deposit terms sit inside the Year 1 Approvals 1% drawdown.

4. Per-SPV regulatory detail

4.1 PD Pasarjaya — DKI Jakarta metropolitan permitting + BUMD partnership

• DKI Jakarta operates as a metropolitan-level government with established permitting capacity and waste-management infrastructure. Project-class permits route through the OSS framework.
• PD Pasarjaya is the BUMD aggregating organic waste from 153 traditional markets — partnership provides Top-48 markets' feedstock at zero tipping fee, with PD Pasarjaya bearing feeder-truck logistics.
• Award process status: Development ✓, MoU ✓ (MoU 454/-1.824.554.1 active, extended to October 2026, aligned with the award date), Feasibility Study ✓. LOI is the next milestone — the bilateral scope-and-ask document with PD Pasarjaya / DKI is being prepared. Award targeted for October 2026 under the active MoU.
• No forestry-use license required (urban Mega AD site, no Perhutani land).
• PMK 130/2020 tax holiday potential under qualifying renewable-infrastructure brackets.

4.2 Bandung — Kota Bandung partnership + IPPKH forestry use

• Award process status: Development ✓, MoU ✓ (signed), Feasibility Study ✓ (presented October 2025 by PT JABUN with Greenviro Solutions + Orec Sdn Bhd as technical partners). LOI is the next milestone — the bilateral scope-and-ask document with Kota Bandung / DLH (covering in-kind MRF, 20% tipping-fee share, and IPPKH support) is in preparation. Award targeted for April 2027.
• Kota Bandung + DLH partnership supplies:
• Full MRF in-kind — Bandung SPV does not carry MRF CAPEX
• 40% tipping-fee share on organic feedstock processed through the AD plant
• Sarimukti site sits on Perhutani land — IPPKH (Izin Pinjam Pakai Kawasan Hutan) is the standard forestry-use license for infrastructure on Perhutani land. The process routes through Kementerian LHK under established procedures, accelerated by Omnibus Law's OSS framework.
• PMK 130/2020 tax holiday potential at the qualifying CAPEX bracket.

4.3 Lamsel — Kab. Lampung Selatan partnership + TPA Lubuk Kamal access

• Award process status: Development ✓, MoU ✓, Feasibility Study ✓, LOI ✓ signed (the bilateral scope-and-ask document with Kab. Lampung Selatan is locked — Lamsel is the most advanced SPV in the portfolio on award-process progression). Award is the next milestone, targeted for October 2027 in line with the original staggered schedule (the model assumes this date despite Lamsel's process lead, preserving the Pasarjaya-first cross-cover sequencing).
• Kab. Lampung Selatan partnership supplies road infrastructure to the TPA Lubuk Kamal site as in-kind support — reduces project civils scope.
• TPA Lubuk Kamal is an active municipal landfill in Kecamatan Natar — feedstock already aggregated at a single geographic point under the existing municipal waste-management system. No new aggregation infrastructure required.
• No forestry-use license needed (TPA is a municipal facility on regency-administered land, not Perhutani).
• PMK 130/2020 tax holiday potential at the qualifying CAPEX bracket.

5. Anchor assumption emerging from Step 4

1. Perpres 109/2025 mandates non-thermal AD for wet organic waste. The project class sits within Indonesia's regulatory priority — the regulatory framework creates the market, not the project class working against it.

2. Local government in-kind support is material across all three SPVs. Kota Bandung supplies full MRF and 40% tipping-fee share. Kab. Lampung Selatan supplies road infrastructure. DKI Jakarta's BUMD (PD Pasarjaya) supplies market-aggregated feedstock at zero tipping fee. Translates directly into CAPEX / OPEX impact.

3. PMK 130/2020 tax holiday available as bankable upside. All three SPVs qualify at the renewable-infrastructure CAPEX bracket — potential 5-year × 100% tax holiday. Held as upside.

4. Omnibus Law's OSS streamlines the permitting layers. Risk-based licensing through the single-window platform consolidates federal-provincial-regency approvals — reduces timeline vs pre-2020 regime, applicable to all three SPVs.

5. Award process is on a 10-stage path: Development → MoU → FS → LOI → Award → Mobilization → FEED → Financial Close → Construction → COD. All three SPVs have completed Development, MoU, and Feasibility Study. Lamsel has additionally signed its LOI (the bilateral scope-and-ask document with Kab. Lampung Selatan) and is at the Award milestone next — the most advanced SPV in the portfolio on award-process progression. PD Pasarjaya and Bandung are both at the LOI milestone next — MoU active and FS done at each, with the bilateral scope-and-ask document with DKI / PD Pasarjaya BUMD (Pasarjaya) and Kota Bandung / DLH (Bandung) in preparation. Award months in the financial model preserve the originally staggered schedule (Pasarjaya Oct 2026 · Bandung Apr 2027 · Lamsel Oct 2027) to keep the Pasarjaya-first cross-cover sequencing intact.