MANILA, PHILIPPINES - Investments in energy efficiency solutions in Indonesia offer a potential $4 billion market for commercial banks and the industrial sector, a Jakarta conference co-organized by the Asian Development Bank (ADB) heard today.
"Indonesia's energy sector is a vast green field of investment opportunities that awaits the participation of the domestic and international banking as well as industrial sectors," said Anthony Jude, Director of the Energy and Water Division in ADB's Southeast Asia Department. "Energy efficiency investments, like low hanging fruits, reap significant returns."
The $4 billion figure is ADB's estimate of the potential market size for retrofits and other energy-saving improvements in commercial buildings and industrial facilities. Types of projects range from electrical system retrofits to improving efficiency of air conditioning systems (including chillers), lighting and waste heat recovery.
For example, a commercial bank might co-finance a $420,000 project to upgrade the air conditioning, pumps and lighting systems of a large office building. These upgrades will bring about huge electricity savings - in this scenario some $100,000 a year - therefore paying back the initial investment in just over four years.
The Jakarta conference, "Financing $4 billion Energy Efficiency Solutions in Indonesia," brought together close to 200 representatives of commercial banks, government, and major industries. The event, which ADB is co-hosting with MKI, the Indonesian Electrical Power Society, and KADIN, the Indonesia Chamber of Commerce, was designed to create mutually beneficial partnerships between commercial banks, equipment suppliers and energy service companies that will in turn promote environmentally sustainable growth.
Agus Purnomo, Head of Secretariat at Indonesia's National Council on Climate Change, noted the significance of the conference taking place just prior to the UN Framework Convention on Climate Change (UNFCCC) talks that get underway in Copenhagen on 7 December.
"The energy sector is a key player in Indonesia's drive to combat climate change," Mr. Purnomo said in a keynote address. "Therefore we strongly welcome national and international commercial banks, as well as equipment suppliers and energy service companies, as critical partners in facilitating new financing opportunities in energy efficiency and renewable energies."
Last year, ADB approved nearly $1.7 billion in clean energy investments, exceeding the bank's target of $1 billion. Under a new Energy Policy passed by its Board of Directors earlier this year, ADB will double its targets for clean energy annually to $2 billion starting 2013.