JAKARTA – Government support for the fulfillment of the New Renewable Energy (NRE) mix of 23 percent in 2025 and Net Zero Emission (NZE) in 2060 is provided through funding for the pumped storage hydropower development in The Java-Bali System project, officials said Monday (14/3).
The Ministry of Finance and PT PLN (Persero) signed the Subsidiary Loan Agreement (SLA) to fund the green energy project. Director General of Treasury, Ministry of Finance Hadiyanto in a written statement said that the loan reached USD610 million, consisting of USD380 million from the World Bank and USD 230 million from the Asian Infrastructure Investment Bank (AIIB).
“PT PLN used SLA as one of the sources to finance power plant development projects in Indonesia, especially New and Renewable Energy power plants,” Hadiyanto said.
He added that the transition to clean and sustainable energy is also one of the important topics raised at the G20 Presidency of Indonesia in 2022. Therefore, he said, to support this commitment and in line with the focus of the Energy Transitions Working Group, funding issues are a priority for the G20 in the energy transition can be overcome by financing sources provided by the government in the form of on-going foreign loans.
“G20 member countries have a great responsibility and strategic role in realizing the transition to clean and sustainable energy, considering that G20 member countries account for around 75 percent of global energy demand,” said Hadiyanto.
Until December 2021, NRE financing through the SLA distributed by the Ministry of Finance has reached IDR 16.26 trillion. In more detail, the SLA financing commitment for NRE that has not been disbursed is IDR 2.82 trillion. Meanwhile, NRE financing which is still in the SLA and loan agreement (LA) process is IDR 13.66 trillion. The financing is used for hydropower and geothermal development projects, as well as green financing facilities. The SLA for financing in the energy sector is channeled to PT PLN and PT Pertamina as well as PT Sarana Multi Infrastruktur (SMI), which is a financing institution for infrastructure development.
Hadiyanto advised PT PLN to carry out the projects financed by this SLA as best as possible and must minimize the potential delays in the implementation of the construction of the project in question.
“With such large funds and the work of constructing a pumped storage hydropower which is full of challenges, PT PLN (Persero) is requested to make a schedule and closely supervise every stage of the project work, starting from the preparation, construction, to the maintenance period of this project,” he said. (Hartatik)
