The United Nations Development Programme (UNDP) and Singapore based renewable energy company Right People Renewable Energy (RPRE) have signed a Statement of Intent in October 2020 to provide electricity from renewable sources in Indonesia’s eastern island of Sulawesi and Bunaken.
According to the agreement, RPRE will provide solar PV and ESS systems to replace or supplement the existing Indonesian state-owned electricity enterprise (PLN)’s infrastructure. The goal is also to expand access to energy from a 12- hour rationed supply to a continuous 24-hour supply.
The improved access will benefit remote communities living in remote pockets of Sulawesi and Bunaken which are not connected to the main PLN Grid. These villages, often with over thousands of residents who have little to no income, have had to rely on diesel generators.
This is a win-win solution and will also help PLN reduce their levelised cost of energy (LCOE) by saving on diesel fuel transportation, generator maintenance and manpower expenses. This solution also contributes towards the Indonesia Government’s national strategic plan on electrification and emissions reductions.
Access to a continuous supply of energy will equip fishermen with the ability to store their catch in cold storage units, thus preserving them; it will also help power filtration systems which, in turn, will help provide clean water. It will also prevent dengue and malaria by providing access to current mosquito repellent systems. Furthermore, the communities will have better internet connectivity.
“RPRE is honoured to be working with UNDP and PLN on this very important program, to use solar PV and batteries to bring access to clean energy to remote villages across Sulawesi - and hopefully across the rest of Indonesia too. We have high hopes and big ambitions to be a force for good, particularly for the bottom of the pyramid communities,” said Robin Pho, CEO and Founder of RPRE.
The project will be piloted in two sites, in Manado Tua and Nain islands, and once proved successful will expand and scale up to a further 23 sites across Sulawesi. Other regions in Indonesia can also be further identified to achieve greater impact.
“The expansion of continuous access to electricity is a big step forward towards development in some of Indonesia’s remote regions. Standards of living will rise for many communities; the use of renewable energy has helped us to scale up energy transformation as we work towards achieving the Sustainable Development Goals” said Muhammad Didi Hardiana, Head of Innovative Financing Lab at UNDP Indonesia.
The joint development will utilise blended financing, which will include both cash and non-cash options. UNDP has completed feasibility studies and the Environmental and Social Impact Assessment for the pilot sites. RPRE will be responsible for arranging debt and equity financing for the capital investment required for the project, and the funds will be fenced in a special purpose vehicle between investors and PLN.
RPRE will continue sourcing other financing partners for future sites. To provide added security to the project, bank guarantees from large global foundations and supporters may also be used to increase investors’ confidence in this important project.