Using Public Funding to Attract Private Investment in Renewable Energy in Indonesia

This briefing by the International Institute for Sustainable Development examines how the Government of Indonesia can utilize public funding and public financial institutions to attract private investment to meet its renewable energy targets, particularly in the context of its 2022 G20 Presidency.

• In 2020, Indonesia's energy sector investment was heavily skewed toward fossil fuels, with IDR 237 trillion (USD 16.5 billion) allocated to fossil fuels compared to IDR 20 trillion (USD 1.4 billion) for the renewable energy sector, which accounted for 7.8% of total energy investment.
• Current renewable energy investment levels are insufficient to reach the nationally determined contribution (NDC) target of a 23% share of new and renewable energy in the national energy mix by 2025.
• To attract private investment, the Government of Indonesia can utilize public financial institutions (PFIs) to provide capital injections, budget transfers, and fiscal incentives.
• The briefing recommends that the government increase investment targets for wind power and solar photovoltaic, diversify beyond geothermal energy, and mandate that energy SOEs—including PT Pertamina and PT PLN—align their strategies with NDC targets.
• The Just Energy Transition Partnership (JETP), led by Japan and the United States of America, pledged US$20 billion (approximately Rp300 trillion) over 3-5 years to accelerate the transition via renewable energy deployment and the early retirement of coal plants.

APA

Hohenberger,, M. H. G. B. S. (2022). Using Public Funding to Attract Private Investment in Renewable Energy in Indonesia. International Institute for Sustainable Development. https://www.iisd.org/publications/brief/using-public-funding-attract-private-investment-renewable-energy-indonesia

Chicago

Hohenberger,, Murtiani Hendriwardani,Anna Geddes,Theresia Betty Sumarno,Laura. Using Public Funding to Attract Private Investment in Renewable Energy in Indonesia. International Institute for Sustainable Development, 2022. https://www.iisd.org/publications/brief/using-public-funding-attract-private-investment-renewable-energy-indonesia.

Wikipedia

{{cite report |last1=Hohenberger, |first1=Murtiani Hendriwardani,Anna Geddes,Theresia Betty Sumarno,Laura |title=Using Public Funding to Attract Private Investment in Renewable Energy in Indonesia |publisher=International Institute for Sustainable Development |date=23 February 2022 |url=https://www.iisd.org/publications/brief/using-public-funding-attract-private-investment-renewable-energy-indonesia |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hohenberger2022using, author = {Hohenberger,, Murtiani Hendriwardani,Anna Geddes,Theresia Betty Sumarno,Laura}, title = {{Using Public Funding to Attract Private Investment in Renewable Energy in Indonesia}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = feb, url = {https://www.iisd.org/publications/brief/using-public-funding-attract-private-investment-renewable-energy-indonesia}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }