JAKARTA - The government through the Ministry of Finance (Kemenkeu) is getting more serious in facing economic challenges and opportunities from the impacts of climate change.
Most recently, the Minister of Finance (Menkeu) Sri Mulyani emphasized that she is currently concocting a new type of financing scheme to support climate action efforts. In his explanation, the Minister of Finance revealed that the scheme in question has the aim of helping the energy transition in the country.
"The current government together with the Ministry of Finance, the Ministry of Energy and Mineral Resources, the Coordinating Ministry for Maritime Affairs and Investment (led by Luhut Binsar Panjaitan), the Ministry of Environment are designing an Energy Transition Mechanism (ETM) financing scheme," he said in a virtual presentation on Tuesday, February 22. .
According to the Minister of Finance, this step is very strategic to ensure the sustainability of national economic development.
“Why is this policy design so important? Because in order for Indonesia to continue to grow, there must be an increasing demand for energy. At the same time, our electrical energy is still dominated by coal base which has large carbon emissions. So we need clean energy that is more environmentally friendly and renewable," he said.
From this condition, the Minister of Finance sees that Indonesia has a big challenge to be able to align economic development goals while still balancing the output of carbon emissions.
“So our challenge is how to develop energy-consuming development without exacerbating carbon emissions. Therefore, the transition to greener energy is very important,” he stressed.
Furthermore, the state treasurer gave a signal that the funds that were raised would be optimized to encourage business actors in the coal-fired energy sector to apply more environmentally friendly principles.
"ETM is designed to provide opportunities for coal power plants (steam power plants/PLTU) to be able to make the transition to green energy," he said.
The Indonesian government itself has stated a commitment to the world to be able to reduce carbon dioxide (CO2) emissions by 29 percent with its own efforts (costs) and 41 percent with international support.
Quoting the official website of the Ministry of Finance, ETM is a form of blended finance designed to accelerate the termination of coal-fired power plants and open up investment for clean energy.
Currently, the Asian Development Bank (ADB) is conducting an analysis of the feasibility of implementing ETM for several PLTUs in Indonesia, after previously going through the pre-feasibility study stage.
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