49787 v1 EXECUTIVE SUMMARY Over 70 million Indonesians are estimated to be Outside of Java-Bali, the current universal tariff structure (TDL) When the PLN does not invest in Java-Bali The majority of new connections needed are outside of Java-Bali one The World Bank xi Electricity for All Options for Increasing Access in Indonesia PROPOSED SOLUTIONS AnEnhancedUtilityOption(PLNSubsidiaryModel) While the current institutional framework is not ideal Indonesian law does not allow xii THE WAY FORWARD electricityforallinIndonesia. The World Bank xiii Electricity for All Options for Increasing Access in Indonesia Barrier Enhanced Utility (PLN) Model (BUMD/BLU) Model National tariff does A consumer not cover costs of service in un- Y PLN has limited VER incentive to further performance by encouraging innovate and cut costs RECO COST Absence of a reliable and effective subsidy mechanism Lack of access to · FINANCING · to new entrants Limited entry into LEADERSHIP todiscrimination towards embedded Absence of SECTOR standard institutional PUBLIC Weakinstitutional assistance level xiv