1. GM International Development Visit – 27 February 2013 OTP Geothermal Sampoerna Strategic Square, North Tower, Level 24th Jl. Jend. Sudirman Kav. 45-46, Jakarta 12930 Combining Strengths. Lighting Up the Future. INTRODUCTION TO INDONESIA Presented by Bret Mattes Jakarta, 27 February 2013

2. GM International Development Visit – 27 February 2013 2 Republic of Indonesia Archipelago of 17,508 islands (~6000 inhabited)Population 248 million (58% on Java) Constitutional Republic, Presidential, Unitary State, Multi-Party, Proportional Representation Tri-Cameral Parliament 2 People’s Consultative Assembly (MPR) Regional Representative Council (DPD) 132 Members People’s Representative Council (DPR) 560 Members

3. GM International Development Visit – 27 February 2013 3 Republic of Indonesia (Continued) Political Subdivisions: Republic – Head of State: President Provinces (34) – Ruled by Governors Regencies (Kabupaten) 399 – Ruled by Regents/Bupati Cities (Kota) 94 – Ruled by Mayors/Walikota Capital City: Jakarta Special Capital Region (Pop. 28.02 Million) – Governor Contains 1 Regency and 5 cities – Regent and Mayors appointed by the Governor Sub-Districts (Kecamatan) Villages (Kelurahan, Desa, Kampung) 3

4. GM International Development Visit – 27 February 2013 4 Indonesia Governance – 3 Branches Executive President Vice President Cabinet Legislative People’s Consultative Assembly (Upper and Lower Houses) Regional/City Assemblies Municipalities Judicial Supreme Court – Cessation Appeals and Case Review Constitutional Court – Legality of Regulations; Scope of Authority State Administrative – Administrative law cases against Government Judicial Commission – Oversight Commercial Court – Insolvency Religious Court – Sharia Law 4

5. GM International Development Visit – 27 February 2013 5 Indonesian State Philosophy - PANCASILA From the Javanese (Orig. Sanskrit) words meaning “Five” and “Principles” The five foundations of the Republic: 1. One and Only One God (Ketuhanan yang Maha Esa) 2. Civil Society (Kemanusiaan yang adil dan beradab) 3. One Indonesia (Persatuan Indonesia) 4. Democracy (Kerakyatan yang dipimpin oleh hikmat kebijaksanaan, dalam permusyawaratan dan perwakilan) 5. Social Justice (Keadilan bagi seluruh rakyat Indonesia) 5

6. GM International Development Visit – 27 February 2013 6 Indonesian Culture and Geography 300 ethnic groups (Javanese 42% of total)742 languages6 official religions: Islam (mostly Sunni) 87% - Origin in North Sumatra Protestant RC Hindu - 3% Buddhist - 2% Confucianism 155 active volcanoes – highest mountain (Puncak Jaya 4900m) and largest lake (Lake Toba 1, 150km²) both volcanic World’s second highest biodiversity (after Brazil) – highest for fishWallace line 6 8%

7. GM International Development Visit – 27 February 2013 7 Indonesia Since 2000 Three successful National Elections + thousands of free and fair Provincial, Regional and Local ElectionsPeaceful exit of the Military from civilian lifeA vigorous free pressStrong, well-regulated banking system (decentralization, credit, consumer lending)Economic growth driven by commodity exports/domestic consumptionLargest palm oil exporter ; second in coal, tin, cocoa3.5 BBBL proven oil ; 110 TCF proven gasYoung population ; 50% <29 years (unemployment 7.6%)Trillion Dollar economy in 2014 (per capita Rp36 million) 7

8. GM International Development Visit – 27 February 2013 8 Most Problematic Factors for Doing Business Inefficient Bureaucracy16.5% Corruption14.2% Infrastructure9% Labour Regulations7% 8

9. GM International Development Visit – 27 February 2013 9 Subsidies 2012 US$ Billion% GDP% Budget GDP995-- Government Spend17817.9- Fuels20.82.111.7 Electricity8.70.94.9 Non-Energy4.42.5 Total Subsidies343.419.1 9 $1.00=IDR 9300

10. GM International Development Visit – 27 February 2013 10 ESDM Old Paradigm Energy supply side management Supply fossil fuels at any cost (subsidies) to inefficient consumers New Paradigm Demand side management Efficient consumers paying full cost of energy Maximize supply/demand of renewables Regulators have not bought into this yet 10

11. GM International Development Visit – 27 February 2013 11 Primary Energy Supply 2011 11

12. GM International Development Visit – 27 February 2013 12 Energy Consumption 12

13. GM International Development Visit – 27 February 2013 13 Electrification Indonesia 68% electrified (ie: 80 million people have no access to electricity) Lowest installed capacity per capita in the region Low uptake of primary energy Land access is a barrier Regulatory framework not robust Heavily subsidized 13

14. GM International Development Visit – 27 February 2013 14 Electricity Balance 2011 Supply Generation capacity 152TWh from 30.94GW of installed capacity Growing 2% pa Geothermal 3.6% of installed capacity Demand 147 TWh Growing 7-9% pa PLN Peak Load 26.2 GW Capacity factor 56% Load factor 78% (34% in Sumatra) System losses 10% 14

15. GM International Development Visit – 27 February 2013 15 North Sumatra – Probably the Best Geothermal Province in the World 15

16. GM International Development Visit – 27 February 2013 16 Lake Toba 16

17. GM International Development Visit – 27 February 2013 17 Lake Toba Expedition Route 17

18. GM International Development Visit – 27 February 2013 18 Panyabungan 18

19. GM International Development Visit – 27 February 2013 19 Panyabungan 19

20. GM International Development Visit – 27 February 2013 20 Mount Marapi 20