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

The document argues that Indonesia must utilize public funding, fiscal incentives, and public financial institutions to attract the private investment necessary to reach its 2025 renewable energy target of 23% of the national energy mix. It highlights a significant investment gap, noting that in 2020, fossil fuel investments (USD 16.5 billion) vastly outweighed renewable energy spending (USD 1.4 billion). The brief recommends increasing investment targets for solar photovoltaic and wind power, improving the traceability of financial flows, and aligning the strategies of state-owned enterprises like PT PLN and PT Pertamina with NDC targets. It also mentions the Just Energy Transition Partnership (JETP), a US$20 billion pledge from developed countries to accelerate the transition through coal plant retirement and renewable deployment.

• In 2020, Indonesia's investment in the energy sector was heavily skewed toward fossil fuels, with USD 16.5 billion (IDR 237 trillion) spent on fossil fuels compared to USD 1.4 billion (IDR 20 trillion) spent on the renewable energy sector, which represented only 7.8% of total energy investment.
• Current renewable energy investment levels are insufficient to meet Indonesia's 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 Indonesian government should utilize public financial institutions (PFIs) for fiscal incentives, budget transfers, and capital injections, while increasing investment targets for wind power and solar photovoltaic to complement existing geothermal investments.
• The Just Energy Transition Partnership (JETP), led by the United States and Japan, has pledged US$20 billion over 3-5 years to support the early retirement of coal plants and the deployment of renewable energy in Indonesia.

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} }