Clean Energy Finance and Investment Policy Review of Indonesia
Indonesia has achieved remarkable economic success over the last two decades, lifting millions out of poverty. The recent COVID-19 pandemic has momentarily halted this economic growth, causing the country’s first recession in decades. Yet, the recovery from the pandemic presents an opportunity to build back a stronger and more sustainable economy, helping Indonesia to achieve its commitments under the Paris Agreement as well as the Sustainable Development Goals.
The transformation of the energy sector can play a central role in greening Indonesia’s economic recovery. With abundant renewable energy resources and potentia for energy efficiency, Indonesia can become a major clean energy market.
In particular, clean energy investment can be a driving force behind Indonesia’s recovery. Renewable energy still accounts for only a small share of electricity generation, and energy efficiency opportunities remain largely untapped. Opening the doors to finance and investment in those clean energy solutions would be a major shift from current trends, in which fossil fuels continue to dominate the energy sector.
Unlocking Indonesia’s clean energy potential requires establishing a market framework that enables the mobilisation of hundreds of billions of dollars in private capital over the next decades. This OECD Clean Energy Finance and Investment Policy Review of Indonesia aims to support efforts to develop that enabling environment and accelerate the country’s clean energy transition.
The report provides a comprehensive overview of the current policy framework, highlighting progress and identifying where changes are needed. It also contains a number of tailored recommendations for the Government of Indonesia and development partners to mobilise private finance and investment for clean energy development.
This Review is the result of a constructive dialogue between Indonesia, a key OECD partner, and OECD member countries alongside other clean energy stakeholders. The OECD will continue to support Indonesia in implementing the report’s recommendations as the country builds back a stronger, cleaner and more resilient economy. I am confident that this collaborative effort will help in mobilising private finance and investment to support Indonesia’s climate action and its overall sustainable development.
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