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Renewable Energy Financing Schemes for Indonesia

Publication | November 2019
Renewable Energy Financing Schemes for Indonesia

This report provides insights on how an Energy Resilience Fund can be established to boost renewable energy investments in Indonesia.

Despite recent efforts by the Government of Indonesia to promote renewable energy investments, fossil fuels continue to account for around 90% of the national power generation mix. High financing costs and low power purchase agreement tariffs have been identified as major roadblocks for renewable energy investments in the country. This report examines how an Energy Resilience Fund can be designed to overcome the investment challenges by providing financial incentives for renewable energy developers. It makes recommendations for the fund’s scope, structure, institutional design, function, and operation. Potential funding sources are also assessed.

Contents 

  • Introduction and Background
  • Current Situation
  • Challenges
  • Definition of Design Parameters and Design Options
  • Evaluation and Recommendations on Financing Instruments for Identified Financial Intervention Needs
  • Brief Summary of Similar Schemes Applied in Other Countries
  • Governance Structure of the Energy Resilience Fund
  • Concept Design of the Viability Gap Fund
  • Concept Design of the Project Development Fund
  • Concept Design of the Credit Enhancement Fund
  • Capitalization Structure and Potential Sources of Funding
  • Conclusion