Jakarta, Indonesia, 6 September – Amid uncertain macroeconomic conditions, rising costs of borrowing and a growing population, financing Indonesia’s net-zero transition has proven to be challenging.
Leaders across government, finance, business and civic society gathered last week to kick off the sixth edition of Unlocking capital for sustainability in Indonesia, the first of the four events across Asia. This year’s edition sees the event being held in-person in Indonesia for the first time.
Themed “Navigating Indonesia’s net-zero journey”, the speakers discussed how the nation can gain access to capital for a just and equitable transition, policy changes and capital allocations needed to reduce its reliance on fossil fuels, and how to safeguard the livelihood of its people while addressing climate change.
Organised by Eco-Business in partnership with United Nations Environment Programme Finance Initiative, this regional forum is part of the annual flagship event on sustainable finance for Asia Pacific that brings together high-level decision-makers to discuss and commit to actionable initiatives that can mobilise capital markets for sustainable development.
Achieving Indonesia’s ambitions to achieve net-zero carbon emissions by 2060 will require the country to triple its investments into renewable energy by 2030 – equivalent to an additional US$8 billion a year by the end of the decade, according to the International Energy Agency.
While the landmark US$20 billion Just Energy Transition Partnership deal — announced by Indonesian President Joko Widodo and other world leaders in November 2022 to help Indonesia reduce its reliance on coal power — was meant to provide aid over the next five years, the launch of its investment plan has experienced delays. Even if delivered, the deal is far from enough to cover long-term expenses needed to achieve Indonesia’s net-zero goal.
Challenges such as the high cost and lack of infrastructure for renewable energy technologies, Indonesia’s heavy reliance on its manufacturing and industrial sectors, the need to address ongoing social issues such as poverty, inequality, and a lack of public awareness around climate change, add complexities to achieving carbon neutrality.
Experts spoke of both the challenges and opportunities in Indonesia’s decarbonisation journey. At the opening of the event, Gigih Udi Atmo, Director for Energy Conservation, Ministry of Energy and Mineral Resources, Indonesia, said that the national priority is to achieve universal electricity access in a country where a large part of the population still lives without electricity.
“Access to energy is our priority. We are a country of more than 17,000 islands and 99 per cent of the population still lives without electricity. We need to provide clean energy access. We have an ambition by 2025 for 23 per cent of the energy mix to be renewable, which is still challenging to achieve.”
“Last year, 12.3 per cent of our energy mix was renewables. Fossil fuels are still dominant in the energy mix. How we can reduce that [reliance] depends on a number of strategies as well as help from the international community,” he said.
Dharsono Hartono, Asean BAC Net Zero Hub and Carbon Centre of Excellence Program Leader and CEO of PT Rimba Makmur Utama, an Indonesian-based company that manages the avoided deforestation Katingan Mentaya Project, noted during his opening keynote that Indonesia and ASEAN have some of the world’s most valuable and investable, carbon stock and biodiversity that will require regional cooperation to protect.
“Upholding our commitment as a region to achieving net-zero in the most just and equitable manner is not going to be easy. But we need to continue moving forward. As a region, we really need to up our game in helping each other and sharing knowledge,” he said.
Lucita Jasmin, Director of Sustainability and External Affairs, for pulp and paper company APRIL, said corporate climate goals can only be achieved through a holistic approach. “Climate ambitions cannot be approached in isolation. We need to take a holistic approach and recognise the dependencies between climate, nature, people and sustainable growth,” she said. “Beyond policy compliance, our commitments and targets must contribute to national and global climate, nature and development goals. This is what our APRIL2030 sustainability agenda aims to achieve.”
Closing the event, Tona Hutauruk, Head of Jakarta Investment Centre, said that cities need to radically transform themselves to be catalysts for sustainable growth.
“As the biggest city in the Southeast Asia region, Jakarta is committed to building a more sustainable and liveable city and catalyse a greener economy on an international, regional and global level,” said Hutauruk, adding that the city of 11.2 million was planning to integrate sustainability and resilience into all elements of urban management.
APRIL Group is the strategic partner of this event, while Pollination is the supporting partner. Knowledge partners include ADB SEADS, Centre for Asian Philanthropy and Society (CAPS), Climate Policy Initiative, Jakarta Investment Centre, Singapore Chamber of Commerce Indonesia and UNDP.
For more information, visit the Unlocking capital for sustainability website at https://www.unlockingcapitalforsustainability.com/indonesia/2023.
For high-resolution photos from the event, please visit this page.
Notes to Editors:
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Gabrielle See, Eco-Business
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About UN Environment
UN Environment is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations. UN Environment works with governments, the private sector, the civil society and with other UN entities and international organizations across the world.
In Asia and the Pacific, UN Environment is helping countries address some of the region’s biggest challenges. From fighting pollution to pursuing sustainable growth, we work with national and local authorities, civil society, other UN entities, financial institutions, regional bodies and networks, research institutions and the private sector to realize positive impact for planet and people.
More details about UN Environment can be found at unenvironment.org.
About Unlocking capital for sustainability
Unlocking capital for sustainability is an annual premiere event organised by Eco-Business in partnership with UN Environment that brings together high-level decision makers in finance, business, government and civic society to discuss and commit to actionable initiatives that mobilise the capital markets for sustainable development projects. The event’s strategic partners include RGE Group, UOB and BDO Unibank, and supporting partners are OCBC Bank, SM Investments Corporation and Pollination.