INA and BII to drum up investment in Indonesia’s green sectors

Jakarta – Indonesia Investment Authority (INA) has allied with British International Investment (BII) to invest in green infrastructure, renewable energy, climate resilience, and adaptation-related sectors in Southeast Asia’s largest economy.

The partnership was formalised on 18 July in Jakarta with the signing of an Investment Framework Agreement (“IFA”) between the Indonesian sovereign wealth fund and the UK’s development finance institution (DFI) and impact investor.

INA and BII will mobilise capital and accelerate investment in select green sectors in Indonesia to achieve development objectives on improved productivity, sustainability, and inclusion. Through the IFA, the parties intend to create a more enabling environment for facilitating investments and partnerships in private sector businesses in Indonesia. By leveraging their combined strengths, experience, networks, and shared vision, the partnership is poised to seek optimal risk-adjusted returns on invested capital, cultivate sustainable economic growth, and address global climate challenges.

INA has designated green energy and transformation as one of its priority investment sectors, focusing on supporting Indonesia’s energy transition toward renewable energy. Earlier this year, INA made its first strategic investment in green energy through PT Pertamina Geothermal Energy (PGE), Indonesia’s largest geothermal energy company.

It also joined forces with Contemporary Amperex Technology Co., Limited (CATL) to establish a Green Electric Vehicle (EV) Fund concentrating on end-to-end EV value chain investment, primarily in Indonesia.

Being the government’s investment arm, INA is marking its commitment to the energy transition mechanism (ETM) by working together with Asian Development Bank (ADB) for a pilot project and PT Cirebon Electric Power (CEP) to support the energy transition in Indonesia by phasing out coal-fired power plants.

Meanwhile, BII, with its 75 years of experience in investing to create more productive, sustainable, and inclusive emerging economies, is committed to boosting climate finance in the region. As part of its 2022-2026 investment strategy, BII re-entered Southeast Asia, including Indonesia, with plans to invest up to £500 million across the capital structure to support the region’s green energy transition. The commitment was recently demonstrated through BII’s $15 million investment in the SUSI Asia Energy Transition Fund (SAETF), a Southeast Asia-focused energy transition infrastructure fund.

Specifically in Indonesia, it has invested in developing run-of-river hydropower and wind projects via a joint venture between SAETF and regional developer Pacific Impact. This investment reiterates the DFI’s renewed commitment to investing in climate finance in Indonesia as one of BII’s priority markets in Southeast Asia. (I Made Sentana)

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