Indonesia

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

The use of limited public funds to pull in private capital has helped to create and expand clean energy markets in a variety of countries. Different institutional models have been used across countries, from the creation of a specialised Green Bank to dedicated green finance facility within an existing institution. Public funds can be used in blended finance models to leverage private finance through a variety of derisking instruments and can help the banking sector gain experience and confidence in financing clean energy projects. A green finance facility or green bank can also play a key role in developing bankable project pipelines.

This FGD aimed to review the current challenges faced by financial institutions in Indonesia to mobilise and reduce the cost of finance for clean energy projects. It helped improve the understanding of Indonesian stakeholders on the unique role that green banks or green facilities can play to de-risk projects and thereby help to lower financing costs and facilitate greater participation of commercial banks and other investors. International experts shared their country’s experience in setting up such institutions or facilities and outlined financing mechanisms used and highlighted lessons learned. Discussions focused on opportunities to increase the use of blended finance mechanisms to reduce funding costs and scale up private sector investments, as well as the identification of key design features of a green finance facility for Indonesia.

Presentations

Speaker presentations

• Dian Lestari, BFK, Ministry of Finance; “Green Finance Facility to Support Clean Energy Projects in Indonesia”
• Ahmad Rifqi, OJK; “Sustainable Financing Support for Clean Energy and Investment” 

Panellists

• Bianca Sylvester, CEFC (Australia); “About the CEFC: Experience setting up a green finance facililty in Australia”
• Muhammed Sayed, DBSA (South Africa); “Climate Finance Facility”
• Bold Magvan, MGFC (Mongolia); “Mongolia Green Finance Corporation”

Discussants

• Leo Hyoungkun Park, Green Climate Fund; “Developing a green finance facility to catalyse private investments”
• Raphaëlle Vallet, Green Investment Group
• Sidonie Gwet, Coalition for Green Capital; “Developing a green finance facility to catalyse private investments”