Minister Of Energy And Mineral Resources Arifin Tasrif Outspoken: Investment For Clean Electricity Projects Up To 2060 Reaches US$1117 Billion

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian government has calculated the investment requirement of US$1.177 billion to build a power plant sourced from new and renewable energy (EBT) of 587 GW until 2060.

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said the government supports all changes that occur to realize the target of EBT and carbon neutrality in Indonesia through fiscal support, regulations, and so on.

"We offer good returns on investments to convince investors," he said at the 2022 Mandiri Investment Forum, quoted from Antara, Wednesday, February 9.

Details of the investment value for the clean electricity project are the construction of a power plant of US$ 1,042 billion and transmission of US$ 135 billion.

Currently, the Indonesian government is preparing a presidential regulation related to renewable energy tariffs to attract investors to invest in Indonesia.

Minister Arifin said that his party had just launched a government procurement plan to increase the proportion of renewable energy in the national energy mix.

In addition, the regulation that has just been issued is the regulation of the Minister of Energy and Mineral Resources regarding solar power plants on rooftops in order to encourage market interest to be involved in the use of new and renewable energy.

"We will use solar power to become the backbone of new renewable energy," said Arifin.

In Indonesia's new renewable energy roadmap, from a total net stun capacity of 587 gigawatts (GW) in 2060, solar power occupies the first position with a capacity of 361 GW.

Followed by battery energy storage systems (BESS) of 140 GW and hydroelectric power (PLTA) of 83 GW.

ESG Managing Director and Global Head Aniket Shah said Indonesia had the potential to leverage existing technology to undertake decarbonization efforts if financing was available.

"This is a multi-million dollar investment, multinational investors and institutions must provide the financing. This plan must be implemented through government policies and domestic and international capital," said Aniket, who also serves as Sustainability Research at Jefferies Group LLC.

Furthermore, Aniket revealed that over the past 15 years there has been a significant increase in global investment directed at environmental, social, and corporate governance (ESG) projects from zero and now to 100 trillion US dollars.

According to him, the investment concept is in line with the United Nations principles for responsible investment.

"International investors are starting to think about the concept of the environment and carbon neutrality investment. These are two closely related concepts which over the last 10-15 years have taken over the financial industry globally and on a large scale," said Aniket.