Indonesia secures US$60mil for solar project
JAKARTA: Standard Chartered, Germany's development finance institution DEG and France's Proparco have announced a US$60mil investment to fund the construction and operation of a solar photovoltaic (PV) plant in Indonesia.
The 92 megawatt-peak Saguling floating solar PV plant, to be located in West Java, will be run by Saudi Arabia's ACWA Power and state-owned electricity company PLN's subsidiary PLN Indonesia Power.
The plant is slated to begin operations in 2026. Once operational, it is expected to offset more than 63,000 tonnes of carbon emissions annually, according to a statement issued on Tuesday by the Glasgow Financial Alliance for Net Zero (GFANZ), of which Standard Chartered is a member.
The project, part of Indonesia's Just Energy Transition Partnership (JETP), marks the first project-level financing deal since the United States formally withdrew from the initiative earlier this year.
The US commitment in Indonesia is greater than US$2bil, made up of non-concessional loans, multilateral development bank guarantees and grants.
Coordinating Economic Minister Airlangga Hartarto said that the Saguling project symbolised global collaboration: 'It represents our joint commitment to accelerate the clean energy transition and support inclusive, sustainable growth.'
French Ambassador to Indonesia, Asean and Timor-Leste Fabien Penone said France had committed more than €450mil or about US$513mil to support Indonesia's energy transition under the JETP.
'The financing by the French development finance institution Proparco of the Saguling floating solar PV plant highlights our commitment to foster innovative renewable energies in Indonesia and to support its sustainable economic growth,' he said in the same statement.
Initially, Indonesia was banking on the US$21.6bil in JETP pledges to transition from coal to cleaner energy.
Roughly half of that funding, or US$11.6bil, is supposed to be raised from the public sector, particularly from the International Partners Group (IPG) members as donor nations, namely Canada, Denmark, France, Germany, Italy, Japan, Norway, Britain and the European Union.
Washington had pledged to contribute over 20% of those public funds, the largest among all IPG members, but has since pulled out of JETP Indonesia.
The rest of the JETP pledges are to be provided by the private sector under the coordination of GFANZ, consisting of Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, MUFG and Standard Chartered.
Indonesia is pinning its hopes on Germany and Japan, the new JETP coleaders, to revive the flailing initiative and accelerate the country's shift from fossil fuels to renewable energy.
German Ambassador Ina Lepel in the same statement on Tuesday said the agreement highlighted growing collaboration between the International Partners Group and GFANZ, marking 'a new phase' where JETP projects were mature enough to secure investment contracts.
Indonesia requires large sums of funding, especially grants for non-bankable projects like the early retirement of coal-fired power plants and for the development of green electricity. — The Jakarta Post/ANN
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