Jakarta – Analysts believe that the government has not optimally utilised existing fund management bodies to fund the energy transition. According to the Institute for Energy Economics and Financial Analysis (IEEFA), existing fund management units such as the Palm Oil Plantation Fund Management Agency (BPDPKS) and the Coal Business Service Agency (BLU), could play this role.
Putra Adhiguna, a researcher at the Institute for Energy Economics and Financial Analysis, said in a discussion organised by Indonesia Cerah, that energy transition funding requires up to IDR 500 trillion (USD 32.7 billion). However, the funding is still unclear, including that from the Just Energy Transition Partnership (JETP) programme.
BPDPKS gets funding from the biodiesel programme or levies from palm oil businesses. The coal BLU is not yet in operation, however when it does, funds from coal exports can contribute to the energy transition program.
“If the BPDKS and coal BLU funds are set aside, it doesn’t need to be much, you can start from 2% first to finance the energy transition,” Adhiguna said.
Furthermore, according to him, the government should also maximise the potential of JETP funding to finance the energy transition, especially to finance the early retirement of coal powered plants. (Hartatik)