UNDP Promotes Village Enterprise (BUM Desa) as Rural Electricity Infrastructure Operators

“ The government of Indonesia put access to energy as one of G20 agenda, considering that energy is a basic need for us, while some people, especially in East Nusa Tenggara, still do not have access to electricity. We are grateful that Indonesia has abundant renewable energy sources. We can utilize local energy sources to increase the electrification ratio, especially in remote areas.” Said Andriah Feby Misna, Director of Various New and Renewable Energy of the Ministry of Energy and Mineral Resources, during her opening remark at Socialization of Local Institutions Role to Support the Sustainability of Rural Electrification Management at Tambolaka Sumba Barat Daya East Nusa Tenggara today (30/09).

In the socialization event, MEMR presents the Special Allocation Fund reactivation plan under the new scheme, Special Allocation Fund for Renewable Energy Infrastructure. The scheme was reactivated to accelerate the national electrification ratio improvement,  increase the new and renewable energy contributions to the national energy mix, and support the regional renewable energy development and Regional Energy General Plan implementation.

East Nusa Tenggara Timur is one of the program beneficiaries. The MEMR approved 88 billion rupiahs to develop 21 out of 33 proposed locations.

Partnership with Village Owned Enterprise (BUM Desa)

Senior Adviser Renewable Energy Strategic Programme UNDP Indonesia, Verania Andria, offered a comprehensive partnership model to achieve renewable energy development targets. “UNDP through funding from Korea International Cooperation Agency, Mentari Program with United Kingdom support, and Special Allocation Fund from MEMR are allocated at the upstream side to develop the rural electrification facilities while in the downstream side, the Ministry of Village supports with the BUM Desa as the operating institution.”

BUM Desa is a village-owned enterprise developed and managed by the village government and has a legal entity. The village government may establish a village-owned enterprise following the needs and potential of the Village. She learns from the ACCESS Project experience with the Solar PV power plant management preparation program by developing and revitalizing the BUM Desa in 21 villages with support from the Energy Patriot. “We can also support the BUM Desa through creative business with Energy Patriot support.” The project, initiated as a partnership between  UNDP Indonesia and MEMR with support from KOICA, targeted the construction of Off-Grid Solar PV Power Plants in 23 locations in East Nusa Tenggara Timur, Southeast Sulawesi, West Sulawesi, and Central Kalimantan Tengah in 2023.

As reported on the MEMR website, to provide clean energy, the MEMR has developed new and renewable energy infrastructures, particularly in remote areas, in the form of solar-PV, micro-hydro, hybrid, and biomass power plants; provision of energy-efficient solar lamps, and solar-powered public street lighting using the state funds or the special allocation funds. Muhamad Suhud, Policy Lead Program Mentari, revealed qualifications for BUM Desa in rural electrification management. “The BUM Desa shall make partnerships with private sectors, obtain the electrification business region, and determine tariff according to national tariff for the  electrification business region.”

Verania Andria said, “One of the sustainability strategies for rural electrification provision is developing local capacity through the development of local institutions in each village”. Not only constructing Solar PV power plants, but The ACCESS Project also trained and certified locals as operators and promoted BUM Desa as a rural electrification management unit. “We want to share the lesson learned from the BUM Desa development as a rural electrification management unit.”