MOU Signing Ceremony to Advance Industrial Energy Efficiency, Highly Innovative Finance Mechanism

Jakarta, 9 November 2022

(Photo caption: The signatories signing the MoU document (Photo by ACE)).

ASEAN Centre for Energy (ACE) and Korean Development Bank (KDB) reached a significant cooperation milestone. On 9 November 2022, ACE together with the Korean Development Bank (KDB), Korea Energy Agency (KEA), PT. Indonesia Infrastructure Finance (IIF), PT. Bank KEB Hana Indonesia, PT. Bank IBK Indonesia Tbk, PT Bank KB Bukopin, PT Bank Shinhan Indonesia, and PT. Bank Woori Saudara Indonesia signed a Memorandum of Understanding (MoU). The MoU aimed to strengthen partnership and cooperation for the “Supporting Innovative Mechanisms for Industrial Energy Efficiency Financing in Indonesia with Lessons for Replication in other ASEAN Member States” Programme. Otoritas Jasa Keuangan (OJK), Ministry of Energy and Mineral Resources of Indonesia, Ministry of Finance, PT. SMI,  and other local banks and industry representatives were also in attendance.

Under the approval by the Green Climate Fund (GCF) board to the proposal (FP196) on 20 October 2022, this programme will increase Indonesia’s capacity to drive a low-carbon development pathway with enhanced energy efficiency and conservation performance by addressing the critical barriers. The programme provides a package of innovative energy efficiency solutions including financial de-risking mechanisms, exploration of new energy service business models, development of a supportive regulatory framework, and technical assistance.

In the opening remarks, Ms. Ida Nuryatin Finahari, M. Eng., Secretary of the Directorate General of Electricity, Ministry of Energy and Mineral Resources of Indonesia, on behalf of SOE leader of Indonesia expressed the government’s gratitude and support for all parties’ collaboration and the GCF board’s approval of the proposal. Mr. Kim Bockkyu, Executive Director of the Korean Development Bank, reaffirmed their support for energy efficiency in industry, including Indonesia’s industrial sector, and the importance of collaboration to make the programme a success. Dr. Nuki Agya Utama, Executive Director of ACE, said this opportunity is important because financing and industry are the way to improve industrial energy efficiency. Dr. Joko Tri Haryanto, Senior Policy Analyst of Fiscal Policy Agency for Climate Change Financing and Multilateral Policy, Ministry of Finance of Indonesia, on behalf of GCF NDA Secretariat of Indonesia supported this program and collaboration while also encouraging other entities to put out more similar proposals that can be channeled by the Fiscal Policy Agency to other prospective partners. He also informed the attendees of Indonesia’s renewed NDCs.

At the last session, ACE and KDB presented the overview and progress of the proposal and programme. Mr. Rio Jon Piter Silitonga, ACE’s Research Analyst, presented the “Market Assessment on Potential Energy Efficient Technologies and Financing in Indonesian Industry Sector. He emphasised that the study is also crucial phase towards the full proposal development for GCF funding support. The study analysed the prioritise sub-sectors and technology for investment focus in Indonesia Industrial sector. It also identified bankable projects for further program support. The programme is expected to contribute to reduction of 1.5 million tonnes of CO2 emissions over the course of 5 years. Ms. Johee Ahn, Deputy General Manager at KDB, highlighted the program’s progress and milestones before the MoU signing. Ms. Ahn says KDB has been at the forefront of the pandemic recovery spending plan’s greener and more sustainable shift. Sustainable efforts include GCF accreditation. She congratulated all parties and hoped the program would run smoothly.



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