Supporting Innovative Mechanisms for Industrial Energy Efficiency Financing in Indonesia with Lessons for Replication in other ASEAN Member States Programme
As the industrial sector in Indonesia is expected to grow steadily, the rise in energy demand is inevitable. If not addressed with the correct approach, this increase could result in higher emissions from the industrial sector, hindering progress in the national’s energy transition.
Therefore, energy efficiency implementation is essential to reduce energy consumption from industrial sector, subsequently helping the government to reach net zero target by 2060. Unfortunately, adoption of energy-efficient technologies and measures is often limited by a wide range of barriers, including lack of awareness, limited access to finance, regulatory challenges, and insufficient capacity.
This programme aims to increase Indonesia’s capacity to address these barriers by exploring innovative energy efficiency package for Indonesia, including de-risking mechanisms, new energy service business models, and technical assistance.
ASEAN Centre for Energy is the executing entity to provide technical assistance in delivering the activities to develop new de-risking mechanisms and capacity building.
Objective & Goals
There are three components to deliver:
Energy Efficiency Finance
To provide backstopping credit risk of local financial institutions’ own loan with the GCF credit guarantee provision. This is managed directly by GCF, KDB and Local FIs, amounting to USD 100 million. This part falls outside ACE’s direct scope but is inherently important in achieving the overall project’s goals.
De-risking Mechanism
ACE will craft numerous of programmes to leverage Indonesia’s capacity in Energy Saving Insurance (ESI) and ESCO financing structures through consultation with key stakeholders and capacity building workshops.
Technical Assistance for the Market Readiness
ACE will craft numerous of programmes to develop Local Financial Institutions’ capacity in understanding the project pipeline, energy audits, and evaluation on energy efficiency projects. In addition, ACE will provide technical advisory for industry players and develop energy efficiency regulatory framework. The implementation of the programmes will be shared with ASEAN Member States through knowledge sharing session with key stakeholders.
Articles
News Clippings
25 August 2023
ASEAN Centre for Energy strengthens regional partnerships through multiple MoUs – Front Row – The Jakarta Post
ASEAN Centre for Energy strengthens regional partnerships through multiple MoUs – Front Row – The Jakarta Post
Partners
Korea Energy Agency (KEA)
Green Climate Fund (GCF)
Korea Development Bank (KDB)
Ministry of Energy and Mineral Resources Indonesia (MEMR)
Ministry of Finance Indonesia
Local Financial Institutions (FI)
PT Indonesia Infrastructure Finance (IIF)
PT Sarana Multi Infrastruktur (SMI)
PT Bank KEB Hana
PT Bank IBK
PT Bank KB Bukopin
PT Bank Shinhan
PT Bank Woori
We connect, inform, and empower ASEAN's energy community. Through regional cooperation, knowledge exchange, and evidence-based insights, ACE drives progress toward a secure, sustainable, and integrated energy future for all, fulfilling its three (3) key roles as:
Catalyst
To advance ASEAN energy goals by unifying and strengthening ASEAN energy cooperation and integration.
Knowledge Hub
To function as an energy data and knowledge hub by providing a knowledge repository and related services.
Think Tank
To serve as an ASEAN energy think tank by assisting with research and practical solutions for the Member States.