Energy and Mineral Resources Ministry will shift subsidies for 18.8 million customers of 900 VA electricity next year to power infrastructure projects. The scrapping of subsidies of the group of customers will save the ministry Rp20 trillion. “For infrastructure projects, including construction of new transmission lines,” Director General of Electricity M Jarman said yesterday, December 4, in a discussion on electricity subsidies in Jakarta.

Jarman confirmed that the Government will base its policies on the law. Including to utilize savings from scrapping subsidy for 2017 to support electricity sector. The Government is aiming to achieve 97 percent of electrification ratio by 2019. As of September, the Energy Ministry recorded 89.3 percent of electrification ratio. “So, nearly 11 percent [regions] are not yet electrified.”

The Government has decided to scrap subsidies for 18.8 million out of 22.9 million customers of 900 VA electricity. The rest, some 4.1 million of the group of customers, are deemed still deserving to receive continued subsidies. The decision will come into effect on January 1, 2017.

Whereas 450 VA customers will continue to receive subsidies next year, Jarman said. “As many as 23 million customers of 450 VA electricity will still get subsidies,” he said.

Small and medium-sized enterprises (SMEs) business 900 VA electricity consumers, according to Jarman, will continue to receive subsidies.

The Government will also continue to provide subsidies for SMEs business 6,600 VA and below electricity consumers, citing domestic business sustainability. “Small-scale businesses consuming 6,600 VA electricity and below will continue to get subsidies. We won’t touch those who are productive like SMEs.” Other beneficiaries of the electricity subsidies are socially-oriented customers, such as houses of prayer, school, and public service buildings.

State-owned electricity company PT Perusahaan Listrik Negara (Persero) is aiming to electrify 1,000-2,500 villages that have no access to power next year. PLN president director Sofyan Basir earlier said that the company could yet meet the target of electrification ratio as some outermost regions and islands are still not yet electrified, such as East Nusa Tenggara, Ambon, and Papua.