Indonesia wants the country's power generators and refineries to pay for imports on letter of credit (L/C) terms as part of the government's efforts to reduce imports and support the flagging rupiah.

The Indonesian currency has hit its weakest levels since the 1998 Asian financial crisis.

Sanctions threat

Energy and mineral resources minister, Ignasius Jonan, says the government wants resource companies to use L/Cs and keep export proceeds in local banks.

If proceeds are kept overseas or outside state banks, companies could be hit with sanctions that "reduce their export capacity" or production, Jonan warned.

Projects postponed

The minister also said the government would postpone or restructure several strategic power and oil and gas projects amid efforts to reduce imports and support the rupiah.

Jonan said around one-half of the country's ambitious strategic projects to boost Indonesia's generating capacity by 15,200 megawatts will be rescheduled to reduce imports.

Power projects typically use 60 to 80 per cent of imported components.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.