Jakarta—PT PLN (Persero) is accelerating its move towards adding 75 gigawatts (GW) of new renewable energy generation capacity in the next 15 years. To achieve this target, PLN is inviting global investors to provide green finance to build clean energy plants and reduce carbon emissions.
During a panel discussion at COP29 in Baku, Azerbaijan, PLN emphasised the importance of sustainable investment to strengthen Indonesia’s energy transition. PLN’s Director of Transmission and System Planning, Evy Haryadi, also emphasised the need for collaboration with various parties, especially the private sector.
“We are committed to accelerating the energy transition by focusing on developing renewable energy-based power plants. However, the success of this program is highly dependent on significant financial support from global investors,” Evy explained in a written statement on Monday, November 19.
Support from international institutions and the private sector
The World Bank’s Global Director of Energy & Extractives, Demetrios Papathanasiou, noted that PLN is important in Indonesia’s energy transition. According to him, PLN’s financial and operational performance needs to be improved to attract more investment in renewable energy projects.
“PLN is the driving force of Indonesia’s energy transition. We see great potential here, but improvements in management and stable regulatory support are needed to ensure investment can continue to flow,” Demetrios said.
Valerie Levkov, Global Director of Energy, Mining, and Sustainable Infrastructure at the International Finance Corporation (IFC), added that the private sector has the capacity to provide the technology and financing needed. However, according to Valerie, regulatory challenges need to be addressed to enable the private sector to play a more active role.
“We have seen the success of the private sector in providing battery storage technology in other countries. This can be implemented in Indonesia if there are clear and stable regulations to guarantee a return on investment,” Valerie said.
Green financing as a solution
PLN proposes various green financing schemes, such as Green Bond issuance and sustainable loans, as concrete steps to attract funds from international markets. Evy Haryadi emphasised that this green financing will be vital in developing NRE infrastructure, especially considering the large amount of funds needed to reach hundreds of rupiah trillions.
“We have prepared several initiatives to mobilise the necessary funding, including issuing Green Bonds. This is not just about building power plants, but also creating 70,000 kilometres of transmission infrastructure that will deliver green electricity to demand centres,” Evy explained.
According to Evy, this investment will not only accelerate clean energy development but also have the potential to create new jobs and drive the local economy, especially in remote areas with great renewable energy potential.
“The islands in Indonesia have different characteristics. Some areas have abundant renewable resources but no energy demand, while in other areas, demand is high, but resources are lacking. Therefore, we need interconnection between islands to balance supply and demand,” Evy said.
PLN is designing a cross-island transmission project to distribute green electricity from areas with surplus energy to areas with high demand. This is part of the decarbonisation strategy towards net zero emissions by 2060. PLN emphasises that achieving this target is only possible with the support of all stakeholders. (Hartatik)
