Indonesia

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Background

The Clean Energy Finance and Investment Review is one of the CEFIM Programme’s key outputs. It will provide an overview of the current policy environment and opportunities for renewable electricity and energy efficiency development in Indonesia, highlighting success stories and good practices as well as identifying areas where Indonesia could strengthen domestic enabling conditions for clean energy finance and investment. The Review endeavours to explore opportunities to accelerate clean energy development in Indonesia as well as consider socio-economic implications of the clean energy transition (e.g. gender equality, regional economy). It will contain an assessment of the current policy environment for clean energy finance and investment and provide  recommendations that are actionable as well as mindful of potential trade-offs or adverse impacts.

Overview

Achieving a clean energy transition in Indonesia will require substantial scale-up in renewable energy finance and investments. Indonesia has set ambitious targets to increase the share of renewables in its energy mix, and private sector engagement can help make significant progress in meeting the renewable targets by 2025 and beyond.

To date, the government of Indonesia, through the Ministry of Energy and Mineral Resources (MEMR) and the national power utility (PLN), has made concerted efforts to increase renewables development, notably with several large-scale hydro and geothermal power installations. Solar and wind resources still remain largely untapped, and overall installation of additional renewables capacity needs to speed up to meet national targets.

Achieving scale-up in renewable energy deployment needs commensurate growth in clean energy financing and investment, including in particular increased private sector capital for renewable project development and through renewable energy procurement. Corporate sourcing of renewables – which already represents more than 465 TWh of active clean energy procurement globally (IRENA, 2018) – can help Indonesia attract these required levels of clean energy finance and investments for renewables development, for instance by enabling increased foreign direct investment from companies and investors looking to align (or shift) their portfolios to the Paris Agreement and/or green taxonomy compliant investments.

This FGD considered policy to enable corporate sourcing of renewable energy, taking into account expansion of industrial zones in Indonesia and pulling from international experiences in renewable energy sourcing (e.g. through renewable energy certificates, with direct investment in renewable energy production, and using utility green/premium tariffs). The FGD discussed the state of play and experience in corporate engagement for renewable energy finance and investment in Indonesia, as well as shared best practices and lessons learned in designing policy for corporate sourcing models in other countries, including the role of renewable energy in attracting foreign direct investment for industry development. The FGD also assessed investor/industry expectations to address any barriers/concerns and unlock finance and investments for renewable energy in Indonesia.

Presentations

Speakers

• Bapak Hariyanto, Director of Energy Conservation MEMR; “Corporate Sourcing of Renewables to Spur Economic Activity and Foreign Investment”
• Pak Ignatius Warsito, Director of Industrial Zones, Ministry of Industry; “Implementation of Clean Energy in Indonesia Industrial Park” 

Panellists

• Sam Kimmins, Head of RE100; “RE100”
• Ian Kay, Chief Financial Officer, Australia Renewable Energy Agency (ARENA); “Attracting Private Investment for Renewable Energy”
• Gina Lisdiana, Director, Allotrope Indonesia; “Clean Energy Investment Accelerator”
• Raditya Pramudiantoro, Senior Sustainability Manager, Danone; “Experience with Solar PV”

Discussants

• Bob Saril, Director Commercial and Customer Service, (PT PLN); “Encourage the National Clean Energy Fulfillment”
• Pak Suryadarma, Chairman of METI-Indonesia Renewable Energy Association; “Indonesia's Experience with Corporate Sourcing of RE”