Indonesia Can Be The First Mobilizer For Energy Transition Through ADB

Photo Illustration: Antara

The collaboration between the Asian Development Bank (ADB) and the Indonesian government was the beginning to create a state platform for the Energy Transition Mechanism (ETM).

Deputy Director of the Asia ADB Development Bank for Indonesia Said Zaidiansyah said the cooperation involved Just Energy Transition Partnership (JETP), the largest financial transaction institution in the world related to energy transition funding.

JETP, which has funds of 20 billion US dollars (around Rp. 300 trillion) is a commitment from the International Partners Group (IPG) consisting of member countries of the G7, Norway and Denmark groups for Indonesia.

"International Partners Group (IPG), Norway, and Denmark have committed US$20 billion to finance Indonesia to achieve several targets, for example 34 percent of clean energy in 2030," Said Zaidiansyah said, quoting Antara, Sunday, June 25.

Indonesia Net-Zero Summit (INZS) 2023 is an annual climate conference held by the Foreign Policy Community Indonesia (FPCI) as a joint meeting room for ministers, officials, diplomats, activists, musicians, celebrities, youth, civil society and others to discuss climate issues, especially in Indonesia.

Said said that on August 16, a Comprehensive Bank Investment Policy (CIPB) will be launched which will determine the scope of JETP.

On the same occasion, Said said that institutions such as ADB could bring various parties who could support the government to achieve the net zero emissions target.

"Therefore, ADB was asked by IPG members and the Indonesian government to provide institutional support and implementation capacity to the JETP Secretariat," said Said.

ADB is a multilateral institution owned by several countries and Indonesia is the sixth largest ADB shareholder.

Said also said that ADB is committed as a climate partner in Asia Pacific by preparing hundreds of millions of US dollars in funds for climate-related transactions until 2030.

"We can also be one of the first drivers for the energy transition in Indonesia," Said said, adding that ADB is collaborating with the Indonesian government and the Philippine government on November 3, 2021 at COP 26.

Said said that the cooperation between ADB and the Indonesian government was the beginning to create a state platform for the Energy Transition Mechanism (ETM).

"This collaboration is the beginning of ADB's collaboration with the government to create an ETM Country Platform where PT SMI (PT Sarana Multi Infrastruktur) is its Country Manager," said Said.

Said stated that ADB is also trying to become a catalyst in climate-related financing.

"For example, one dollar that comes in can lead to funding from various parties, and we have several schemes for that," said Said.

Currently ADB is making a new scheme called Innovative Financing for Climate in Asia Pacific (Innovative Financing for Climate in Asia Pacific/IFCAP).

"We are trying to ask for funding from various donors, where later we can provide guarantees for one project where IFCAP will provide a guarantee that each budgeted dollar is expected to receive funding from other parties of around 4-5 dollars," said Said.