JAKARTA – The International Institute for Sustainable Development (IISD) reported that the Government of Indonesia invested in the development of new and renewable energy (EBT) in 2021 for only around USD 1.51 billion or around Rp. 21.69 trillion. This amount is around 0.04% of the funding requirement of USD 37 billion, to achieve the green energy mix target of 23% by 2025.
The main author of the IISD report, Theresia Betty Sumarno in an official statement, Friday (25/2), stated that the 37 USD funding requirement was in line with the projection of the Ministry of Energy and Mineral Resources (ESDM).
“Indonesia needs to invest more than 8 billion USD every year, if it wants to achieve a 23 percent NRE energy mix by 2025. But the government is currently only targeting an average annual investment of 2.1 billion USD,” she said.
In this regard, the government should have started encouraging the private sector to invest in the clean energy sector. Moreover, the development of NRE can significantly contribute to the economic recovery after Covid-19 and the green energy transition.
“To mobilize private investment in green energy, the government must improve the clarity of current financial flows and the allocation of public financing for EBT projects,” Sumarno added.
Furthermore, according to her, this is done to increase the confidence of private investors and international funders. The government can effectively utilize national and international public funding institutions in the energy sector, such as PT Penjaminan Infrastruktur Indonesia (PT PII), PT Sarana Multi Infrastruktur (PT SMI), including PT Indonesia Infrastructure Finance (PT IIF).
The use of these institutions must be optimized, in order to accelerate the development of Indonesia’s EBT. Furthermore, the IISD report also highlights the role that state-owned energy companies, such as PLN and Pertamina, can play. these energy companies must more closely align their strategies in order to achieve their zero emission targets. (Hartatik)
