On 23 September 2009, the Indonesian President signed law no. 30/2009 on electricity (hereinafter: New Electricity Bill) and thereby introduced new local content preferences in the electricity sector.
According to articles 16(3) and 17(3) of the New Electricity Bill, in the conduct of power service business and power industry business, 'state owned entities, region-owned entities, private entities, and cooperatives must give precedence to domestic products'.
Also, article 28d of the law stipulates that 'power supply license holders must give precedence to domestic products and potential'.
Similar guidelines were introduced in the electricity law from 2002 (law no. 20/2002 art. 50(2)f) but that law was later revoked in 2004 by the Supreme Court, as it was deemed unconstitutional.
With the new law in place, however, Indonesia has abolished the monopoly of the state electricity company on the supply and distribution of electricity - paving the way for private domestic and foreign investment.
The New Electricity Bill came into force on 23 September 2009.