Need An Investment Of 500 Billion US Dollars For The Energy Transition Project, PLN Invites G20 Countries To Collaborate

President Director of PLN Darmawan Prasodjo. (Photo: Doc. PLN)

JAKARTA - PT PLN (Persero) invites all parties, including G20 member countries to collaborate in reducing carbon emissions in order to achieve the Carbon Neutral target by 2060. Currently, PLN is running several programs ranging from building new renewable energy (EBT) plants to accelerating coal-based generator retirement.

PLN President Director Darmawan Prasodjo explained that in the 2021-2030 PLN Electricity Supply Business Plan (RUPTL), PLN would build renewable energy plants of around 51.6 percent of the target for adding new plants. "We are aware that this is not enough. PLN also admits that it cannot do all this on its own. Therefore, the solution is to collaborate together," said Darmawan in his statement, Thursday, July 14.

He emphasized that PLN needed support through low-interest financing, policy frameworks, and project collaboration. PLN requires an investment of up to 500 billion US dollars to be able to carry out the energy transition project.

"Because all of our efforts will also have a direct impact on the world. For example, the carbon emissions produced in Bali will also have an impact on Europe and Japan. So our efforts to reduce emissions that will have a direct impact on the world need support," said Darmawan.

The Director General of Financing and Risk Management at the Ministry of Finance (Kemenkeu) Luky Alfirman explained that in carrying out the energy transition, Indonesia has PLN as the main player. Various efforts to reduce carbon emissions have been carried out by PLN, ranging from reducing emissions from the power generation sector, to encouraging the community to be actively involved in the use of electricity-based energy in their daily lives. This step is taken as an effort to reduce dependence on fossil-based energy.

"PLN is one of the key players in the energy transition. PLN needs collaboration support from all parties so that the planned energy transition program can run well," said Luky.

Luky explained that the Indonesian government is very open to clean energy cooperation schemes to achieve global emission reduction targets. Indonesia encourages the existence of a Blended Finance scheme that is able to become a win-win solution in terms of investment.

“Blended Finance is one way to provide a funding solution for the energy transition. I believe all countries want to achieve this ideal. So we need cooperation to be able to achieve this," said Luky.

Blended finance is intended to find the optimal financing scheme by combining several sources of funding or financing in one project such as from the government budget, private parties, and donors.

The Asian Development Bank (ADB) also invites all parties to assist Indonesia in achieving this carbon emission reduction target. ADB, which has been collaborating with Indonesia on clean energy projects, admits that there are no doubts about Indonesia's commitment.

"We have been helping Indonesia in clean energy projects for a long time. Of course, we will always support Indonesia. We invite all parties to have the same passion to answer Indonesia's needs," said Vice President for East Asia, Asian Development Bank, Ahmed Saeed.

ADB's commitment is manifested in the financing of PLN's electricity project of US$600 million which was agreed in May 2022. This funding from ADB is used by PLN to strengthen the transmission network in Indonesia and also the construction of EBT-based power plants.