Landscape of Indonesia Power Sector Finance

Between 2015 and 2021, Indonesia's power sector tracked USD 35.6 billion in finance, with 58% allocated to renewable energy. While RE finance trended upward after 2016, it faced a setback in 2020 due to COVID-19 and the Omnibus Law. To reach the 2060 NZE target, Indonesia requires USD 16.1 billion in annual financing, leaving a current annual gap of USD 13.1 billion, most notably in solar and wind power.

• Indonesia has established a series of escalating renewable energy (RE) mix targets: 23% by 2025 (National Energy Policy/RUEN), 43% by 2050 (LTS-LCCR), and 87% by 2060 (NZE Energy Sector Roadmap).
• There is a massive shortfall in annual financing for renewable energy; while the NZE 2060 scenario requires USD 16.1 billion per year, tracked finance between 2015 and 2020 averaged only USD 2.7 billion per annum, resulting in an annual underinvestment of USD 13.1 billion.
• Total tracked power sector finance from 2015 to 2021 was USD 35.6 billion, with 58% directed toward RE generation and 42% toward fossil fuels (primarily coal).
• Debt instruments were the primary source of power sector finance, accounting for 78% of total tracked commitments, with 55% of that debt going to fossil fuel generators (mostly 2015-2017) and 45% to RE generators (increasing since 2018).
• International finance provided 65% of the tracked commitments from 2015 to 2021. Between 2017 and 2018, international sources reduced fossil fuel finance by 67% to focus on gas and diesel, with no new commitments for coal.
• Renewable energy finance saw a 30% increase in new commitments starting in 2016, but experienced a setback in 2020 due to the COVID-19 pandemic and the Omnibus Law, which eased coal mining permit extensions.
• Solar and wind power exhibit the widest investment gaps to meet 2060 targets, with solar power alone requiring an additional USD 4.6 billion annually.

APA

Climate Policy Initiative (2023). Landscape of Indonesia Power Sector Finance. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/08/CPI-2023_Landscape-of-Indonesia-Power-Sector-Finance-FINAL.pdf

Chicago

Climate Policy Initiative. Landscape of Indonesia Power Sector Finance. 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/08/CPI-2023_Landscape-of-Indonesia-Power-Sector-Finance-FINAL.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Landscape of Indonesia Power Sector Finance |date=August 2023 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2023/08/CPI-2023_Landscape-of-Indonesia-Power-Sector-Finance-FINAL.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2023landscape, author = {{Climate Policy Initiative}}, title = {{Landscape of Indonesia Power Sector Finance}}, institution = {Climate Policy Initiative}, year = {2023}, month = aug, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2023/08/CPI-2023_Landscape-of-Indonesia-Power-Sector-Finance-FINAL.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }