DPR Commission VII's Support For Blended Finance For Accelerating Clean Energy Transition

The speakers at the Indonesia Net-Zero Summit (INZS) 2023 held by the Foreign Policy Community of Indonesia (FPCI) in Jakarta, Saturday (24/6/2023). (DOC. ANTARA/Bayu Saputra)

JAKARTA - Member of Commission VII DPR and Chairman of the House of Representatives' Green Economy Caucus, Mercy Chriesty Barends, expressed their support for the implementation of blended finance regulated by the Ministry of Finance to accelerate the transition to clean energy.

"The strongest signal comes from the Ministry of Finance, and what we support is the acceleration of the implementation of the energy transition mechanism through blended finance," he said while speaking at the Indonesia Net-Zero Summit (INZS) 2023 organized by the Foreign Policy Community of Indonesia (FPCI) in Jakarta, Saturday.

Blended finance is a financing scheme that combines several sources, such as government budgets, the private sector, and donors.

Quoted from ANTARA, Saturday, June 24, Mercy assessed that the blended finance regulated by the Ministry of Finance is an efficient way to accelerate the energy transition in Indonesia without having to rely fully on the state budget.

Currently, the government has three ongoing blended finance platforms. First, SDG Indonesia One, which is a mixed financial platform managed by PT Sarana Multi Infrastruktur (SMI) to finance SDGs from various sources, such as international donors, climate financial institutions, green investors, commercial banks, and multilateral development banks (MDB).

Second, through a partnership between the government and the private sector (public private partnership/PPP), which is used to finance certain infrastructure projects.

Third, sukuk or green bonds, which are innovative financing instruments to support expansionary fiscal policies and green infrastructure in Indonesia.

Furthermore, to speed up the energy transition process, Mercy revealed that his party is currently waiting for the Ministry of Energy and Mineral Resources and PT PLN (Persero) to issue the 2045, 2050, and 2060 Energy Transition Roadmap (Roadmap) to clarify the estimated budget needed.

He projects that the required budget will reach almost IDR 4 thousand trillion.

"The budget is very large, almost Rp. 4,000 trillion. If we divide it until 2030, around Rp. 300-Rp. 400 trillion is needed to solve this problem," he concluded.

INZS 2023 is an annual climate conference organized by the FPCI as a meeting forum for ministers, officials, diplomats, youth, civil society, musicians, celebrities, and various other groups to discuss climate issues, especially in Indonesia.