Indonesia is asking China to help construct enough solar capacity to power 100 mid-sized cities, but Jakarta is determined to keep ownership of those assets in its own hands. The request, made on July 17 in Shanghai by Indonesia's coordinating minister for economic affairs, Airlangga Hartarto, to China's commerce minister, Wang Wentao, envisions 100 gigawatts of new solar by 2029—a scale that would rival the electricity output of a major industrial nation.
Indonesia has already launched 14 projects at various stages, totaling 5.3 gigawatts, including a 1-gigawatt solar-plus-storage facility in Bali. The full program, the government says, will require US$73 billion in investment. Airlangga used the word "invest" in his pitch, but the more accurate term for China's role is "build." An investor puts in capital and shares risk; a builder receives a fee and moves on. China fits the builder role far better in President Prabowo Subianto's ambitious solar plan.
A model that works: Cirata
From Jakarta's perspective, the Cirata floating solar plant in West Java offers a hopeful precedent. The 145-megawatt, US$140 million facility—the largest of its kind in Southeast Asia—was developed through a joint venture between PLN Nusantara Power, a subsidiary of Indonesia's state utility, and Masdar, a UAE renewable energy firm. China's state-owned PowerChina served as the engineering, procurement, and construction (EPC) contractor, while the Indonesian-UAE joint venture retained ownership. This arrangement illustrates a model PowerChina can replicate elsewhere: acting as a contractor without taking an equity stake in the generating asset.
Such a structure aligns with Xi Jinping's post-2021 emphasis on a "small and beautiful" Belt and Road Initiative, which favors more targeted projects over the mega-deals of earlier years. It also reflects a broader shift: Chinese sovereign lending to developing countries has dropped sharply, with new commitments averaging about US$7 billion a year since 2023, and net flows turning negative by US$34 billion in 2024.
Financing without Chinese capital
Indonesia does not necessarily need Chinese money to bankroll its solar plan. In 2025, the government introduced a guarantee framework for renewable-energy projects, covering certain payment risks involving PLN and other state entities, making projects more attractive to lenders. Danantara, Indonesia's new state investment fund, has said it will help fund the scheme. On August 26, Pahala Mansury, the fund's managing director for global relations and governance, said Danantara can act as an equity investor, backed by new multi-source bonds.
Jakarta has also eased local-content requirements that previously deterred foreign investors. Together, these moves open the project to a wider pool of lenders and investors beyond China. This setup suits Beijing: Chinese factories can produce about 1,200 gigawatts of solar panels annually, far exceeding global demand. That oversupply has crushed prices and profits—revenue from Chinese solar exports fell from US$42.3 billion in 2022 to US$23.7 billion in 2025, even as shipment volumes rose. Panel prices dropped from 25 US cents per watt in 2022 to about 7 cents in 2025, and several major Chinese manufacturers are now losing money, so they need new buyers.
Indonesia fits that bill. Its solar capacity is projected to grow from 2.15 gigawatts in 2025 to nearly 15 gigawatts by 2031. In short, Chinese companies arguably need Indonesia's market more than Indonesia needs any single Chinese supplier.
Not a choice between China and the West
Indonesia is not picking China over the West so much as taking what is on offer. The United States canceled its own US$7 billion solar program for low-income households and has cut foreign aid for clean energy. The EU's Team Europe package for Indonesia's energy transition totals 3.4 billion euros—significant, but small relative to the US$73 billion investment requirement. On July 30, Indonesia's environment minister, Moh Jumhur Hidayat, met China's climate envoy, Liu Zhenmin, to discuss deeper cooperation on clean energy, a real and welcome step.
China is well suited to help build Indonesia's solar dream. That could mean supplying equipment and construction expertise, paid through capital Indonesia raises internally, including through partners like Danantara. For Jakarta, the opportunity is clear: use China's extraordinary manufacturing scale and construction expertise without handing Beijing a stake in Indonesia's power system. China can supply the panels, batteries, and engineering; Indonesia can raise the capital and retain the assets.
The smartest deal, in other words, may be one in which China helps build Indonesia's solar future—but Indonesia owns it.
