Indonesia's Energy Sector Faces Budget Absorption Challenges

Low Absorption Rate Despite Additional Funding

The Indonesian Ministry of Energy and Mineral Resources is facing challenges in budget absorption, with only 31.12% of the total Rp 14.10 trillion budget utilized as of November 10, 2025. Minister Bahlil Lahadalia reported this during a working meeting with Commission VII DPR RI, highlighting the discrepancy between allocated funds and actual expenditure.

Budget Breakdown and Revised Projections

The ministry's initial budget allocation was Rp 8.4 trillion, of which approximately Rp 696.88 billion was returned due to efficiency measures, leaving an effective budget of Rp 7.84 trillion. Based on this adjusted figure, the absorption rate stands at 65%. Bahlil expressed optimism that the ministry could achieve a 94% absorption rate by year-end, contingent on maintaining current spending trends.

Implications for Energy Sector Projects

The current absorption rate raises concerns about the implementation capacity of various energy projects under the ministry's purview. Despite the challenges, the ministry has received additional funding beyond the initial allocation, bringing the total available budget to Rp 14.10 trillion. The significant difference between the initial and total budget highlights the dynamic nature of budget management in the energy sector.

Government's Strategic Response

Bahlil's confidence in reaching a 94% absorption rate suggests proactive measures are being taken to accelerate project implementation. The ministry's ability to effectively utilize the allocated funds will be crucial for achieving energy sector targets and maintaining momentum in infrastructure development.