JAKARTA –  The planned

appears to have hit a snag, as appointed electricity exporters face challenges in securing financing under Jakarta’s licensing rules.

Several Indonesian and multinational companies have been

and sell the output to Singapore, based on multiple memoranda of understanding (MOUs) inked between the two countries in 2023. The projects involving billions of dollars are expected to begin commercial operations by early 2028.

However, The Straits Times understands that none of the solar farms have seen significant construction progress yet as companies face challenges in securing financing for the projects.

The projects would have had to begin construction by now, in order to meet the delivery deadline, analysts said.

Senior executives from the Jakarta-based companies told ST that one important detail seems to have rendered the projects “unbankable”, or deemed too risky for a bank loan.

Specifically, Indonesia requires renewable energy exporters to renew their permits every five years under Clause 37 of the Ministry of Energy and Mineral Resources’ (ESDM) 2021 regulation on electricity business operations . This creates uncertainty, since the government can revoke a licence, or reduce the permitted export quota, if it determines that electricity exports are disrupting domestic supply and causing local blackouts.