Indonesia Needs Rp4.7 Quadrillion in Investment for Energy Transition

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Adi Ahdiat 26/10/2022 11:20 WIB

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To accelerate the energy transition, Indonesia requires significant infrastructure development, technological advancements, and substantial investment.

Indonesia's Required Investment for Accelerated Energy Transition (2018-2030)

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Indonesia Needs Rp4.7 Quadrillion in Investment for Energy Transition

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Indonesia's Required Investment for Accelerated Energy Transition (2018-2030)

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Indonesia ratified the Paris Agreement on Climate Change in April 2016. This agreement includes a commitment to limiting the global temperature increase to a maximum of 1.5 degrees Celsius above pre-industrial levels.

To fulfill this commitment, Indonesia needs to undergo an energy transition, reducing the use of fossil fuels and increasing the utilization of new renewable energy (NRE).

However, this energy transition requires significant infrastructure development and substantial investment.

According to the International Renewable Energy Agency (IRENA), to accelerate the energy transition and achieve the 1.5-degree Celsius commitment in the Paris Agreement, Indonesia needs short-term investments of US$314.5 billion, or approximately Rp4.7 quadrillion (at an exchange rate of Rp15,000/US$), during the period 2018-2030.

This investment is needed to boost the sales of electric vehicles (EVs) in the domestic market, increase the capacity of NRE power plants, and build supporting infrastructure, as detailed in the graph.

"A significant obstacle in driving Indonesia's energy transition is funding and investment. Funding sources need to be expanded, and local financing capacity needs to be improved," stated IRENA in its Indonesia Energy Transition Outlook report released in October 2022.

"In many cases, Indonesian banks have not yet implemented financing for renewable energy. Developers needing financing for renewable energy projects need to approach international investors or financial institutions," it continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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Indonesia Needs Rp4.7 Quadrillion in Investment for Energy Transition

Indonesia Needs Rp4.7 Quadrillion in Investment for Energy Transition

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Indonesia Needs Rp4.7 Quadrillion in Investment for Energy Transition

Indonesia Needs Rp4.7 Quadrillion in Investment for Energy Transition

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