UK PACT supports Indonesia implement energy conservation, innovative financing models

Jakarta – The UK is continuing its strategic support for Indonesia to accelerate its energy transition and tackle the climate crisis through the second phase of the UK PACT (Partnering for Accelerated Climate Transitions) programme. The programme not only promotes energy efficiency in the building sector, but also introduces innovative financing instruments to mobilise green finance in the country.

“Energy efficiency is an important pillar of our energy transition strategy. Through UK PACT, we can strengthen market-based policies and open access to innovative financing for energy conservation projects,” said Eniya Listiani Dewi, Director General of New, Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources, on Wednesday, 4 June.

Since its launch in November 2022, UK PACT has driven a number of important achievements, including the contribution to the drafting of Government Regulation (PP) No. 33 of 2023 on Energy Conservation, as well as the formalisation of Energy Saving Supervisors who are tasked with monitoring the implementation of efficiency policies in the field.

In addition to supporting national policies, the programme also initiated two green financing pilot projects, introducing risk mitigation instruments such as Energy Savings Insurance and partial credit guarantees, which paved the way for a blended finance model in the energy sector.

“This financing model provides confidence for local financial institutions to enter the energy conservation sector, especially for small and medium-scale projects that have been struggling to access financing,” Mr Eniya explained.

Five new projects prioritise climate mitigation

Entering its second phase, UK PACT will launch five new projects aimed at expanding the scope of energy efficiency policies. These projects aim to enhance local government engagement by developing provincial and municipal energy efficiency roadmaps. Promote the mobilisation of green finance, both domestically and internationally. Then, strengthening cross-sector coordination and technical capacity of energy businesses across Indonesia.

“In this second phase, our focus is broader – not only at the central policy level, but also encouraging synergies across regions, sectors, and institutions,” Eniya added.

Amanda McLoughlin, UK Director of International Development for Indonesia, said that collaboration through UK PACT is part of the UK’s long-term commitment to supporting climate action and energy transition in partner countries.

“The programme provides opportunities for small and medium-sized enterprises to adopt energy efficiency, and build a portfolio of projects that are ready for funding. We want to expand the success of the pilot projects and strengthen national and regional capacity,” said Amanda.

The signing of an Implementation Agreement between the Director General of EBTKE and the UK Government marked the launch of the second phase of UK PACT. This agreement marks the start of strategic cooperation to significantly reduce emissions through more inclusive and scalable energy efficiency policies and financing. (Hartatik)

Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)

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