Jakarta (ANTARA) - Indonesia explores the blended finance opportunity with Denmark for energy transition financing at the bilateral meeting between both nations held during the G20 Development Ministerial Meeting (DMM) 2022 Side Event forum in Belitung on Wednesday.

G20 is an international forum comprising 19 countries and the European Union that work together to handle major issues. Indonesia is holding the presidency of the grouping this year.

Blended finance is an optimal financing scheme that combines several sources of funding or financing within one project, such as the budget from the government, private sector, and donors.

Indonesia has the commitment to reducing the greenhouse gas effect through own efforts by 29 percent in 2030, Minister of National Development Planning Suharso Monoarfa told reporters in Belitung, Bangka Belitung Islands, on Wednesday.

The existence of aid through the blended finance scheme is capable of reducing the greenhouse effect to 45 percent by 2030. Indonesia also aspires to achieve zero carbon emissions by 2060, he noted.

According to Monoarfa, the major issue that Indonesia encounters in connection with energy transition is how to reduce the greenhouse gas effect from energy in Java Island.

Currently, the percentage of electricity coming from renewable energy only reached 14 percent. Meanwhile, the rest of the 86 percent are still being transitioned to renewable energy gradually, he explained.

In connection with this, two issues are highlighted, with the first concerning technology utilized for transition to renewable energy while the second involves financing.

The government seeks to have a financing source, business model, and financial model that will not be discontinued. Hence, one of the financial models that it seeks to develop is blended finance, the minister noted.

The Indonesian government also explores inexpensive, long-term financing sources for renewable energy that it discussed about with Denmark, he added.

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Translator: Fathur Rochman, Fadhli Ruhman
Editor: Rahmad Nasution
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