Perusahaan Listrik Negara—Indonesia’s national power company—is one of the world’s largest vertically integrated power utilities. It is engaged in one of the world’s largest electricity infrastructure development programs, requiring US$181 billion in investment over 10 years. However, the regulatory mechanism for the calculation of PLN’s maximum allowed revenue understated the revenue needed for PLN to raise the finance it required. Moreover, the split of the allowed revenue into consumer tariffs and the Public Service Obligation subsidy placed increasing burden on the budget, making the subsidy fiscally unsustainable. If PLN were not able to finance the required investment on its own balance sheet, the government, in addition to providing the PSO subsidy, would also be forced to fund some of the investment program directly, further compounding fiscal risks.