Nusa Dua, Bali – The Indonesian government is implementing a blended finance scheme in clean energy investment, encouraging the improvement of energy infrastructure in Indonesia and accelerating the transition to net zero emissions. This mixed funding combines financing from the state and regional budgets, the public sector and from philanthropists to bilateral and multilateral institutions.
Shinta Kamdani, Chair of B20 Indonesia 2022 and Steering Committee Tri Hita Karana (THK) Forum, a forum that supports climate action, Thursday (1/9) in Bali said that currently average investment for clean energy is around USD 9 billion per year. This number is expected to continue to grow to USD 16 billion, as demand for energy increases. “That means we need at least $2 trillion to cover the financing gap,” she said.
The Boston Consulting Group (BCG) Center for Climate and Sustainability estimates that the funding investment needed to achieve the target of reducing the global temperature increase of 1.5 degrees Celsius is around USD 2.1 trillion.
“The Indonesian government has demonstrated national and global partnerships to initiate blended finance solutions. This partnership will invest based on the value of Tri Hita Karana (THK) initiated by President Joko Widodo,” Kamdani said in the Tri Hita Karana Climate Road to G20 High Level Dialogue titled ‘Making History for Climate Action: Unlocking Finance for the Energy Transition and Oceans’.
The event was initiated by B20, Indonesian chamber of commerce (Kadin), United in Diversity Foundation, SDSN, ICC, and the Global Blended Finance Taskforce. In attendance were Coordinating Minister of Maritime Affairs and Investment Luhut Binsar Pandjaitan, U.S. Special Presidential Envoy for Climate John Kerry, B20 Indonesia 2022 chairperson and THK Steering Committee Shinta Kamdani, Kadin chairman Arsjad Rasjid and General Chair of the Indonesia Peace Foundation and Executive Lead of the Tri Hita Karana Forum Tantowi Yahya.
Pandjaitan said that the opportunity for transformational changes in the energy mix lies in untapped renewable energy sources. Indonesia has also developed a blended finance approach for fossil fuels phase out. “We are looking for ways to institutionalise the technology transfer and financing process,” he said.
John Kerry, U.S. Special Presidential Envoy for Climate said, clean energy transition is the largest market the world has ever seen. “It’s not something to fear — that we have to shun and shy away from,” he said, adding that the world should embrace this transition which will “be larger than the Industrial Revolution was.” (Hartatik)