Policy inconsistency impeding Indonesia’s green finance drive: experts | News | Eco-Business

One key stumbling block is the continued support for fossil fuels, experts said.

“Doing things in renewable energy is one thing,” said Pradana Murti, director of risk management at state-owned project financing firm PT Sarana Multi Infrastruktur.

“With the current excess supplies in Indonesia, we are forced to think about early coal retirement as well,” he added.

Indonesia’s coal power buildout in the past years means that the country is producing more than 1.5 times its needed power, crowding out the market for renewable projects, according to a report by American think-tank Institute for Energy Economics and Financial Analysis. 

Indonesia also subsidises domestic coal power generation by capping the price at which its state utility firm buys the commodity, even as it has already set a target to close all coal plants by 2055, and is considering hitting net-zero emissions by 2060. Two-thirds of Indonesia’s electricity comes from coal today.

Governments tend to have headline climate ambitions but retain development policies that run counter to their goals, said Zoe Whitton, managing director of London-based climate consultancy firm Pollination.

A “consistent policy” that supports sustainable infrastructure development will be key, Whitton said, in response to a question on the key enabler for Indonesia’s green growth.

Having a clear, stringent guide on what counts as green projects will also attract investors keen to demonstrate their support for…