Paris Alignment of Power Sector Finance Flows in Indonesia: Challenges, Opportunities, and Innovative Solutions

This policy brief analyzes the financing landscape of Indonesia's electricity generation sector and its alignment with the Ministry of Energy and Mineral Resources' Net Zero Emission 2060 Scenario, highlighting the dominance of fossil fuels and the role of international finance.

• Between 2015 and 2020, total tracked power sector finance commitments averaged USD 5.3 billion per year. While renewable energy investments grew from 2017 to 2019, there was a setback in 2020.
• Fossil fuel-based power plants received 46 percent of finance commitments, with coal-fired projects accounting for 84 percent of that fossil fuel total. Renewable energy projects received 44 percent (34 percent for grid-connected and 10 percent for mini grid/off-grid), while other renewable technologies and market support received 9 percent.
• International sources, specifically Development Finance Institutions (DFIs), provided 65 percent of all power sector finance commitments. Between 2018 and 2020, international finance for fossil fuel-based energy (mainly coal) decreased by 68 percent due to global policy signals and market preferences aligning with the Paris Agreement.

APA

Climate Policy Initiative (2022). Paris Alignment of Power Sector Finance Flows in Indonesia: Challenges, Opportunities, and Innovative Solutions. https://www.climatepolicyinitiative.org/publication/paris-alignment-of-power-sector-finance-flows-in-indonesia-challenges-opportunities-and-innovative-solutions/

Chicago

Climate Policy Initiative. Paris Alignment of Power Sector Finance Flows in Indonesia: Challenges, Opportunities, and Innovative Solutions. 2022. https://www.climatepolicyinitiative.org/publication/paris-alignment-of-power-sector-finance-flows-in-indonesia-challenges-opportunities-and-innovative-solutions/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Paris Alignment of Power Sector Finance Flows in Indonesia: Challenges, Opportunities, and Innovative Solutions |date=4 March 2022 |url=https://www.climatepolicyinitiative.org/publication/paris-alignment-of-power-sector-finance-flows-in-indonesia-challenges-opportunities-and-innovative-solutions/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2022paris, author = {{Climate Policy Initiative}}, title = {{Paris Alignment of Power Sector Finance Flows in Indonesia: Challenges, Opportunities, and Innovative Solutions}}, institution = {Climate Policy Initiative}, year = {2022}, month = mar, url = {https://www.climatepolicyinitiative.org/publication/paris-alignment-of-power-sector-finance-flows-in-indonesia-challenges-opportunities-and-innovative-solutions/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }