PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDONESIA

The document analyzes power sector financing in Indonesia from 2015 to 2020, revealing a significant investment gap for renewables and a continued reliance on fossil fuels. While international finance for coal dropped sharply after 2018, domestic finance remains heavily skewed toward fossil fuels. To meet the 2060 Net Zero target, Indonesia requires USD 16.1 billion annually for renewables, compared to a tracked average of USD 2.7 billion. The report highlights solar energy as having the largest investment gap and suggests leveraging blended finance, green sukuk, and the Energy Transition Mechanism to phase out coal and scale up clean energy.

• Between 2015 and 2020, total tracked power sector finance commitments averaged USD 5.3 billion per annum, with fossil fuel-based projects accounting for 46 percent and renewable energy projects for 44 percent.
• International sources provided approximately 65 percent of all power sector finance commitments between 2015 and 2020, with a notable 68 percent drop in international finance for fossil fuel-based energy (primarily coal) between 2018 and 2020.
• There is a substantial annual underinvestment in renewable energy of USD 13.4 billion to meet the Ministry of Energy and Mineral Resources's (MEMR) NZE 2060 Scenario, which requires USD 16.1 billion per year compared to the tracked average of USD 2.7 billion.
• Solar power exhibits the widest investment gap among renewables, requiring an additional USD 4.6 billion annually to achieve 2060 targets.
• Indonesia is on a path toward an annual overinvestment in fossil fuels of USD 0.2 billion, as current trends suggest USD 4.3 billion in annual investment while the 2060 target requires a reduction to USD 4.1 billion.
• Disbursements for renewable energy projects were 65 percent lower than finance commitments between 2015 and 2020, whereas fossil fuel disbursements were 37 percent higher than commitments.
• The Energy Transition Mechanism (ETM), announced by the Asian Development Bank at COP26, aims to retire 5.5 GW of coal-fired power plants in Indonesia by 2040, requiring an estimated USD 25-30 billion in funding support.
• Innovative financing tools like the SDG Indonesia One platform and Green Sukuk have successfully mobilized capital; the latter has raised USD 3.24 billion cumulatively to fund sustainable infrastructure.

APA

Mafira, T., Larasati, L., & Siagian, A. (2022). PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDONESIA. Sustainable Energy for All. https://www.seforall.org/system/files/2022-06/Indonesia-power-brief.pdf

Chicago

Mafira, Tiza, Luthfyana Larasati, and Albertus Siagian. PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDONESIA. Sustainable Energy for All, 2022. https://www.seforall.org/system/files/2022-06/Indonesia-power-brief.pdf.

Wikipedia

{{cite report |last1=Mafira |first1=Tiza |last2=Larasati |first2=Luthfyana |last3=Siagian |first3=Albertus |title=PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDONESIA |publisher=Sustainable Energy for All |date=March 2022 |url=https://www.seforall.org/system/files/2022-06/Indonesia-power-brief.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mafira2022paris, author = {Mafira, Tiza and Larasati, Luthfyana and Siagian, Albertus}, title = {{PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDONESIA}}, institution = {Sustainable Energy for All}, year = {2022}, month = mar, url = {https://www.seforall.org/system/files/2022-06/Indonesia-power-brief.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }