Ministry Of Energy And Mineral Resources Affirms Government Does Not Intervene Energy Transition Financing Scheme In ASEAN
JAKARTA - The Indonesian government will not intervene in financing schemes in ASEAN countries for the transition to clean energy by 2060.
"We will not uniformly finance from each country," said Secretary General of the Ministry of Energy and Mineral Resources (ESDM) Dadan Kusdiana on the sidelines of the 41st ASEAN Energy Ministers Meeting and the ASEAN Energy Business Forum in Nusa Dua, Badung Regency, Bali, quoted from Antara, Thursday, August 24.
According to him, a financing scheme cannot be implemented in all countries to fund programs aimed at reducing carbon emissions.
He explained that the institutions that facilitate financing in ASEAN include the Asian Development Bank (ADB) based in the Philippines.
The multilateral bank, he continued, encourages financing supported by the ASEAN Center for Energy (ACE) under the ASEAN structure.
Although energy transition financing in ASEAN cannot be uniform, Dadan added that all countries in the region agreed to encourage creative efforts for funding.
Meanwhile, ACE Corporate Relations Manager Andy Tirta believes that investment in the energy sector, including clean energy to support inter-state connectivity, will attract investors because energy demand continues to increase.
The International Energy Agency (IEA) projects that energy demand in ASEAN will grow on average by three percent per year.
"Obviously many people (investors) are interested in helping from the development bank or private sector. This is a business whose investment must be used, there are buyers, and the dominant can be decades," said Andy, who is also the chairman of the ASEAN Energy Business Forum.
Previously, Minister of Energy and Mineral Resources Arifin Tasrif in the ASEAN Energy Financing Forum stated that solutions to attract investment to support the energy transition in Southeast Asia include blended finance.
In addition, it can also be through cooperation between the government and business entities (PPP), and international funding.
Based on a report by the International Renewable Energy Agency (IRENA) to implement the energy transition, countries in ASEAN need to finance around 29 trillion US dollars by 2050 with a 100 percent renewable energy scheme.
The investment is for the construction of renewable energy plants, national and international distribution trasmics, storage of plant-based fuel, electrification, electric cars, and electric vehicle charging stations.
Not only that, it also concerns labor and operational costs.
To encourage private investment, the government has prepared incentives, policy frameworks, and transparent investment procedures.