JAKARTA - The government through the Ministry of Finance (Kemenkeu) has officially launched a country platform as part of the energy transition mechanism (ETM) in Indonesia.
Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance Febrio Kacaribu said the country platform was released in collaboration with the Asian Development Bank (ADB) and PT Sarana Multi Infrastruktur (PT SMI).
"This is an important momentum to encourage all members and other countries to carry out their climate financing commitments with real and implementable initiatives," he said in a written statement at the G20 side event, Friday, July 15.
According to Febrio, ETM is an ambitious plan that can boost Indonesia's energy infrastructure improvements and accelerate the energy transition towards net zero emissions in a fair and affordable way by 2060 or accelerated.
"Indonesia places the highest priority on the clean energy transition. Through this transition we need to ensure that the economy can continue to grow and requires more energy and electricity, but at the same time has to reduce emissions," he said.
Febrio added, to overcome this, a combination of early retirement efforts from coal-fired power plants is needed and simultaneously developing renewable energy.
"Early retirement will be carried out in a measurable and gradual manner in the medium and long term. The government ensures that this transition remains affordable for the community, the business world, and also for the state budget," he stressed.
For information, ETM consists of two schemes. First, the carbon reduction facility (CRF) scheme is used for early retirement of coal-fired power plants (PLTU) in Indonesia.
Meanwhile, the second scheme is a clean energy facility (CEF) aimed at developing or investing in the construction of green energy facilities.
This mechanism is expected to be a joint solution for the community, investors, the regional economy, and the environment.
"To arrive at the implementation level, the arrangements in the mechanism must be well defined, including participating institutions, financing instruments, challenges, and expected financial and economic benefits or losses," Febrio continued.
Sri Mulyani's subordinate also explained that the country platform for ETM is a framework that provides financing needs in accelerating the national energy transition by mobilizing funds from public and private sources in a sustainable manner.
To ensure its effectiveness, the ETM country platform can be adapted and adapted based on the local context and needs of each country according to its specifications, priorities and regulations.
Indonesia's country platform investment sources will come from blended finance through PT SMI, including philanthropists, bilateral or multilateral development agencies, and climate finance institutions.
"Country platform ETM will be one of the real deliverables in Indonesia's G20 Presidency. We will continue to strive to be an example for other countries and hope that the same commitment can be implemented by other countries and development partners in the region and globally," closed Febrio.
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