Rationale

Indonesia’s energy policy direction has been in favor of fossil fuel, particularly coal, more than renewable sources. If the trend continues, the country is at risk of locking itself into an unsustainable energy future.

In the face of fiscal constraints, the private sector plays a key role in scaling up investment in renewable energy and helping Indonesia out of carbon lock-in. There is a strong need to make effective use of blended finance to allow renewable energy projects to provide attractive risk-adjusted return to private investors. In the meantime, continuous energy policy reform is critical to prepare Indonesia’s energy system transition to one that provides security, affordability and sustainability for all.

Objective

The long-term objective of our Clean Energy Program is to support Indonesia’s transition to a low carbon economy powered by renewable energy.

CPI work

Analysis

• Policy levers of Ministry of Finance to accelerate renewable energy development in Indonesia.
• Low Carbon Development Indonesia: Thematic study on energy sector.
• A series of study that look at opportunities to use blended finance for accelerated renewable energy deployment considering risk and return profile of particular renewable technologies.

Technical Assistance

• Green investment banks in Southeast Asia: Accelerating public and private investment for clean energy development.