US funding agency poised to fund NRE investors in Indonesia

Jakarta – The US International Development Finance Corporation (DFC) has expressed interest in investing in energy transition projects in Indonesia. Apart from the energy sector, DFC is also interested in investing in the health sector, affordable housing, agriculture, solutions to climate problems based on sustainability, and education.

DFC CEO Scott Nathan said in a written statement that they had met with potential partners. Although the exact amount of investment was not stated, DFC is committed to development in Indonesia. DFC assesses that there is high interest in diversifying the power generation portfolio by including hydrogen, geothermal, wind and solar as new and renewable energy (NRE).

According to Nathan, if there are companies that meet the various criteria set, DFC will support with funding and technical assistance. He said, in Indonesia DFC already has projects with funding reaching USD 285 million.

On the sidelines of last year’s G20 Summit, PT HDF Energy Indonesia, Hydrogene de France Group-Euronext Paris, became DFC’s partner to support the development of a multi-megawatt renewable power plant. The first project was built in Sumba, East Nusa Tenggara, to support Sumba’s development.

Minister of Energy and Mineral Resources (EMR) Arifin Tasrif said Indonesia and the United States were among the countries that formed the JETP financing scheme. Indonesia is also working together with Japan on energy transition financing through follow-up funding commitments through the Just Energy Transition Partnership (JETP) scheme. Japan has an interest in supporting the acceleration of the energy transition in Indonesia considering that many Japanese entrepreneurs are investing in the domestic energy sector.

Japan also supports funding through the Energy Transition Mechanism (ETM) which managed to collect initial concessional funds of USD 500 million from various global partners.

Both the JETP and ETM schemes aim to accelerate the energy transition in the electricity sector. ETM especially will be used to finance the early shutdown of the coal-fired power plants. The detailed plan for funding and the use of these funds is still being finalised by the Indonesian government with partner countries the United States and Japan, which is planned to be completed in May 2023. (Hartatik)

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