Document background
A Power Sale Agreement is a fundamental document in Indonesia's energy sector, used to establish a long-term contractual relationship between power producers and purchasers. It is essential for any power generation project in Indonesia, whether conventional or renewable energy, and must comply with Law No. 30 of 2009 (The Electricity Law) and related regulations. The agreement typically spans 20-30 years and covers all aspects of power generation and sale, including technical specifications, pricing mechanisms, operational requirements, and risk allocation. It's particularly crucial for independent power producers (IPPs) seeking to develop power projects in Indonesia, as it provides the foundation for project financing and establishes the revenue stream for the project. The document must address specific Indonesian regulatory requirements, including PLN's role as the primary power purchaser, local content requirements, and environmental compliance standards.
