Blended finance is a financing scheme that combines several sources, such as the government budget, private sector, and donors.
During the Indonesia Net-Zero Summit (INZS) 2023 here, Saturday, Barends said she deems blended finance as one of the efficient methods to expedite Indonesia's energy transition without having to rely on the state budget.
The government currently has three ongoing blended finance platforms.
The first is SDG Indonesia One that is a blended finance platform managed by state-owned enterprise PT Sarana Multi Infrastruktur (SMI) to finance Sustainable Development Goals (SDGs) from multiple sources.
These include international donors, climate finance institutions, green investors, commercial banks, as well as Multilateral Development Banks (MDBs).
The second is through public-private partnership (PPP) that is an arrangement between public and private funding to finance certain infrastructure projects.
The third is green bonds that is an innovative financing instrument to support an expansive fiscal policy and green infrastructure in Indonesia.
Moreover, to expedite the energy transition process, Barends said that the House currently awaits the issuance of the 2045, 2050, and 2060 Energy Transition Road Map by the Ministry of Energy and Mineral Resources and state-run enterprise PT PLN (Persero).
The legislator of the House's Commission VII explained that the issuance of this road map will lay out the budget estimation.
She estimated that the required budget almost reached Rp4 thousand trillion, or around US$265.95 billion.
"Therefore, if we divide it until 2030, there is around Rp300-Rp400 trillion (US$19.95-US$26.60 billion) to resolve this issue," she noted.
The INZS is an annual climate conference held by the Foreign Policy Community of Indonesia (FPCI).
It serves as a meeting space for ministers, officials, diplomats, youngsters, civil societies, musicians, celebrities, and various other groups to discuss climate issues, specifically in Indonesia.
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Translator: Bayu Saputra, Fadhli Ruhman
Editor: Sri Haryati
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