Section 1 of this report gives an overview of power sector reform in Indonesia. It concludes a number of options for construction companies to engage in the reform process with the aim of incentivising the social performance of contractors in relation to poverty reduction. Section 2 briefly describes the Lot 3 project, its organisational structure and geography. The main drivers for a ‘pro–poor’ approach to social performance in major construction projects are described in Section 3 with reference to the Lot 3 project. Opportunities for optimising the poverty reduction performance of construction projects are discussed in Section 4 in relation to the contracting process, and in Section 5 in relation to project implementation. A general set of recommendations are made to BBG in Section 6.