Project Readiness: Unlocking Indonesia's Hydropower Potential

Date : Aug 2026

Unlocking

Potential

Hyrdropower

JAKARTA - As Indonesia accelerates its energy transition, strengthening project readiness will be essential to turning the country's hydropower potential into investable and sustainable infrastructure.

Indonesia has to  hydropower more reliable energy . Under the RUPTL 2025–2034, hydropower is  to the country's renewable energy .

Yet unlocking this potential requires more than identifying viable sites or securing financing. Hydropower projects often involve long development cycles and complex technical, environmental, social, institutional and financial considerations. Ensuring that these elements are addressed and aligned from the early stages of development is therefore critical to project readiness.

Why Project Readiness Matters

In a recent discussion on accelerating hydropower investment and advancing Indonesia's energy transition, Abdul Malik Sadat, Deputy for Infrastructure at Indonesia's Ministry of National Development Planning (Bappenas), highlighted the importance of comprehensive project preparation.

Project readiness extends beyond engineering design. Technical studies need to be supported by appropriate environmental and social preparation, regulatory and institutional arrangements, and a financing framework that can support implementation.

For hydropower projects, this preparation can take many years. Aligning these different aspects of development can help reduce uncertainty, strengthen investment confidence and create a clearer pathway from project concept to implementation.

The growing emphasis on approaches such as HydroSelect and the Hydropower Sustainability Standard (HSS) also reflects this broader perspective, with sustainability and investment readiness increasingly considered as integral parts of hydropower development.

Lessons from Major Hydropower Projects

The importance of long-term project preparation can be seen in several major hydropower developments highlighted in the discussion, including Peusangan, Asahan III and Upper Cisokan.

These projects represent different development contexts, but each illustrates the importance of sustained preparation and coordination across the project lifecycle.

Peusangan reflects the long-term nature of hydropower development, with project preparation and implementation extending across different stages and financing arrangements. The project is part of Nippon Koei's long-standing involvement in Indonesia's hydropower sector.

Asahan III demonstrates how project readiness can extend beyond technical preparation. In 2026, the project became the first hydropower project in Indonesia to receive certification under the Hydropower Sustainability Standard (HSS), highlighting the growing importance of sustainability considerations alongside technical and financial aspects of hydropower development.

Upper Cisokan, meanwhile, illustrates the long preparation period that can be required for technically complex hydropower infrastructure. As highlighted by Bappenas, the project has undergone a development process spanning around 15 years, underscoring the importance of aligning engineering preparation with financing and implementation strategies.

Together, these examples show that project readiness is not a single milestone achieved before construction. It is an ongoing process of strengthening the technical, institutional, financial and sustainability foundations of a project.

From Project Readiness to Sustainable Delivery

‍For engineering and infrastructure practitioners, this broader understanding of project readiness is increasingly important.

A technically sound design is fundamental, but successful project delivery also depends on how engineering decisions interact with financing, environmental and social considerations, institutional arrangements and long-term sustainability objectives.

Nippon Koei's experience in Indonesia's hydropower sector spans multiple stages of the project lifecycle, from feasibility studies and planning to detailed design and construction supervision. Its involvement in major hydropower developments such as Peusangan, Asahan III and Upper Cisokan provides practical experience of the challenges and requirements associated with developing complex energy infrastructure over the long term.

This experience reinforces the importance of considering project readiness from a holistic perspective. Project readiness is not simply about securing financing. It is about creating the technical, institutional, financial and sustainability foundations needed for successful project implementation and long-term value.

As Indonesia continues to unlock its hydropower potential, strengthening project readiness can help create a stronger pipeline of projects that are technically sound, environmentally and socially responsible, financially viable and ready for implementation.

For the country's energy transition, the ability to prepare projects well may be just as important as the resources themselves.

Source: Intimedia, “Project Readiness Seen as Key to Accelerating Hydropower Investment and Advancing Indonesia's Energy Transition”