PROJECT DESCRIPTION
The Government of Indonesia needed to revive a national economy that had experienced strong 6.0%–6.4% growth during 2010–2012 but hovered at about 5% during 2014–2016; the government set an ambitious target to raise its annual economic growth rate to 8% by 2019. Achievement of this target depended mostly on the government’s ability to revive an underperforming energy sector characterized by heavy dependence on coal, widespread government subsidies for fuels and electricity, lagging deployment of renewable energy (despite an abundance of renewable energy resources), and a low electrification rate in many small power markets and remote areas. The government recognized the crucial role of the energy sector in the realization of the country’s economic growth aspirations and made the sector a key part of its National Medium-Term Development Plan, 2015–2019. The government initiated a series of sector reforms in 2013–2014, 1 which became the foundation of the programmatic approach of the Sustainable and Inclusive Energy Program (SIEP).