Sri Mulyani Says Energy Transition Needs Support from All Parties

JAKARTA - Minister of Finance Sri Mulyani Indrawati said that Indonesia's energy transition steps require support from all parties, including the business world.

According to her, the energy transition from fossil-based resources to new, renewable energy (EBT) has consequences for the need for large fiscal and investment space. Investment needs include the construction of generators, transmission and distribution lines to demand centers.

"PLN cannot possibly do that alone, there will definitely be many consequences in terms of its Capex (Capital Expenditure). For example, if there are assets that then have to be retired. "Also for investment in smart grids and distribution networks," said Sri Mulyani, quoted Friday, November 3.

In order to meet the energy transition needs in Indonesia, Sri Mulyani said that a long-term and extraordinary fiscal strategy is needed.

For this reason, she said that the existence of the State Revenue and Expenditure Budget (APBN) plus collaboration from the business world could help various energy transition efforts in Indonesia.

"It's impossible to talk about a green industry if the industry is dirty. So everyone says now that if we talk about green, the energy must be green, that's why America uses the inflation reduction act, they want to green the energy side, and that requires a very large investment," said Sri Mulyani.

Sri Mulyani also said that her party had met and discussed with PLN regarding its needs towards an energy transition starting from coal conversion, increasing more renewable energy sources, the impact on PLN's financial balance to the effect of the transition on the basic costs that the public must pay.

"There will be a lot of issues in the APBN. Capex, our PMN to PLN, then we have to discuss compensation subsidies and what if there is an asset that has to be terminated early, how to value it," concluded Sri Mulyani.