Prepare Financial Resources For Energy Transition, SMI Appointed Government To Become An ETM Country Platform Manager

Illustration. (Photo: Doc. Antara)

BALI The government through the Ministry of Finance has officially launched the Energy Transition Mechanism (ETM) Country Platform which is a form of main coordination and drive to encourage a just and affordable transition in Indonesia for the energy sector.

Minister of Finance (Menkeu) Sri Mulyani said, "ETM Country Plathrm Indonesia will send a strong signal throughout the world that Indonesia is able to carry out a fair and affordable transition from fossil fuels to environmentally friendly energy."

"It is important for us to be able to solve the threat from this platform, the ETM Country Platform, to be able to demonstrate Indonesia's readiness to utilize financial resources in the energy sector that can provide reliable and affordable energy while remaining committed to climate change," he said in Nusa Dua, Bali on Monday, November 14.

According to the Minister of Finance, the Indonesian government has appointed PT Sarana Multi Infrastruktur (SMI) as an ETM Country Platform Manager to develop a financing and investment framework for the ETM program.

On the same occasion, ADB President Masatsugu Asakawa revealed that Indonesia's development in ETM provides an example for other countries in paving the way for a carbon-free future.

ADB continues to be committed to supporting this effort throughout Asia and the Pacific. I hope ETM has the potential to become one of the largest carbon reduction models in the world," he said.

For information, in September 2022 the Indonesian government will issue an improved NDC with a commitment to achieve a 43.2 percent emission reduction target with adequate international support by 2030.

Meanwhile, the Indonesian Platform's ETM Country will take advantage of a mixed financial approach to accelerate the transition from fossil fuels to environmentally friendly energy.

Following technical assessments and discussions with stakeholders, RI has identified more than 15 CFPP gigawatts to be stopped early, the first step in determining short-term measures and means to accelerate the transition from fossil fuels to environmentally friendly energy.

Indonesia itself cooperates with several international partners, including multilateral and bilateral institutions, philanthropy, and private investors to support the energy transition.

Furthermore, the management board of the Climate Investment Funds, one of the multilateral fundings for the world's largest emerging countries climate action, recently agreed in principle on USD 500 million in soft funding support for Indonesia.

The fund will move more than $4 billion in financing to speed up cessation of up to 2 GW from several coal-fired power plants to reduce about 50 million tonnes of carbon dioxide emissions by 2030 and 160 million tonnes by 2040.

For information, the announcement of the ETM Country Platform Indonesia took place at the same event where ABD signed an MOU with PT PLN, Cirebon Electric Power, and the Indonesian Investment Authority (INA) to start discussions regarding the acceleration of the cessation of Cirebon-1, a 660 megawatt coal-fired power plant in West Java. INA is working on a flow of 1,5 GW of the private sector's transaction potential, including Cirebon-1.