Regulatory and Institutional Review: Electrification in Indonesia’s Frontier, Outermost, and Underdeveloped (3T) Regions
Abstract
Government of Indonesia sets an ambitious target of 100% of electrification ratio by 2029 to support inclusive economic growth. However, despite a reported national electrification ratio of 99.83%, Frontier, Outermost, and Underdeveloped (3T) regions continue to suffer from unreliable service and frequent asset abandonment. This study investigates the institutional and regulatory root causes of these disparities. Using a qualitative institutional analysis combining regulatory review, stakeholder mapping through a RACI (Responsible, Accountable, Consult, and Informed) framework, and comparative policy synthesis, we identify a fundamental “Accountability Paradox” in the current governance structure. The analysis reveals that the separation of mandates between the Ministry of Energy and Mineral Resources as the regulator, the Ministry of Finance as the financier, and PLN as the operator creates a vacuum of accountability for long-term sustainability, particularly for off-grid systems. Furthermore, while the institutional and regulatory framework disperses funding responsibility across multiple levels of government, resulting in fragmented financing arrangements, state-centric subsidy mechanisms create financial asymmetries that constrain private and community participation. To address these structural inefficiencies, this paper proposes the establishment of a dedicated Public Service Agency (BLU) for 3T Energy. The proposed institution functions as a centralised orchestrator to integrate electrification programs, financing mechanisms, and performance-based incentives, thereby shifting the national electrification paradigm from connectivity toward sustainable service quality.