Erik C. Sentosa – Director PT. Suntech Solar System suntechsolarsystem

1. FiT Solar Auctions in IndonesiaLessons Learned from Participation of a Local EPC CompanyGerman-Indonesia Business Forum on Grid-Connected PV Systems Intercontinental Jakarta MidPlaza Hotel Erik C. Sentosa – Director PT. Suntech Solar System www.suntechsolarsystem.com

2. List of Contents • Brief Company Introduction • Conditions of Solar Auctions • Auctions Progress • Lessons Learned • Summary & Recommendations Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

3. Brief Company Introduction • PT. Suntech Solar System established in 2007 • EPC Company for RE, specializing in PV (On-Grid, Off-Grid and Hybrid Systems) • Authorized Distributor & Partner in Indonesia for SMA and Suntech Power • Emphasis on technical expertise, detailed engineering, know-how, quality components and good installation Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

4. Conditions of Solar Auctions • Regions and system sizes defined by Ministry of Energy and Mineral Resources (ESDM) • Auctions held by Directorate General of New & Renewable Energy and Energy Conservation (EBTKE) • Total quota 140MW for 80 locations (regions) with sizes 1 to 6 MW • Ceiling Tariff : USD0.25/kWh for imported modules, USD0.30 for modules with local content >= 40% • PPA with PT. Perusahaan Listrik Negara (PLN) for 20 years without price adjustments • Bid language: Bahasa Indonesia • Auction open for state-owned enterprises , local goverment-owned enterprises, private Indonesian enterprises and bidding consortia • International companies via Project Joint Operation (KSO), JV or Consortium with private or state-owned enterprises in Indonesia Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

5. Conditions of Solar Auctions (Cont’d) • Online auction: register to http://lelang.ebtke.esdm.go.id • Download tender documents, Q&A sessions, upload of bid documents, evaluation progress & reasons • Tender documents: 120+ pages, fortunately most are identical for all locations • Contents: Administrative, Technical, Financial, Draft of PPA • Bid evaluation (elimination): Administrative -> Technical -> Financial -> Bid Price • Bid Bond 2% and Escrow Account 20% of overall project price Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

6. Conditions of Solar Auctions (Cont’d) • Tender Download – Upload of Bid: 14 days preparation • Bid Evaluation – Winner Announcement: 2-3 weeks • Make Escrow Account: 15 days after announcement • PPA Signing – Grid Interconnection Study: 60 days after announcement • Financial Close: within 3 months after PPA • Installation - COD: latest 18 months after PPA Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

7. Conditions of Solar Auctions (Cont’d) • Purchase price includes all cost of generation to point of grid interconnection • Purchase price are including VAT (PPN) 10% • Payment in IDR with exchange rate valid on the time of payment Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

8. Auction Progress • First tender started beginning November 2013 • So far total of 11 locations (19.5MW) tendered • 4 locations (4.5MW) out of 11 failed due to tender conditions are not met by participants • Lowest Bid Price: 18.36 cents US per kWh with imported modules • Last tender announced on March 2014, currently FiT solar auction program is under evaluation before more locations are to be tendered • No information when more locations are to be tendered • 70 (+4) locations with volume of 120.5(+4.5)MW are still to be tendered Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

9. Lessons Learned • Exact locations are not defined by ESDM • Insufficient coordination between ESDM-PLN-Local Government • GPS coordinates are required in bid document, no alternate location • Bid document requires land availability • Limited preparation time for complete bid documentations • Slightest error in bid documents will result in elimination • Insufficient or no data for grid conditions • Grid capacity only based on computer model simulation, different from actual at site survey • Grid connected PV capacity >20% of grid capacity -> prone to grid failure • Therefore, advanced region choosing - site survey - bid preparation needs to be done prior to tender announcement Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

10. Summary Site Survey after region choosing: • Coordinate with local ESDM – PLN – Local Govt – Local Land Authority for suitable sites • Make sure of land ownership (certificate) & price, not part of protected forest or conflicting with land allocation • Close distance to PLN Grid or Substation • Site is disaster-free (flooding, tsunami, landslides, etc.) • Site survey for grid conditions (load, capacity, future grid expansions) • Transport facility, access to site, handling facility, closest seaport & airport to site Continue to bid preparation before tender announcement Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

11. Reccomendations • Improve coordination between ESDM – PLN – Local Goverment – Local Land Authority to define suitable or “perfect” sites and set the land prices at a reasonable predetermined prices for the auction winners to reimburse • This would avoid a lot of uncertainties and unnecessary efforts, save time and money Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

12. Thank You • Vice-Minister of ESDM and Director General of EBTKE once said “..IPP investors are like heroes and pioneers..” • Let’s become heroes together and for each other.. Dipl.-Ing. Erik Chandra Sentosa Director – PT. Suntech Solar System Email: erik@suntechsolarsystem.com Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System