LPI – A Glimpse of Hope for Renewable Energy Development

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Renewable energy (RNE) is the key element for the country’s national energy strategy in the world. With that in mind, Indonesia government committed to boost RNE projects which will be a great contribution in reducing carbon dioxide emissions. These green energy sources come from the oceans, geothermal, bio-energy, wind, hydro and solar which abundantly possessed by our beloved country, Indonesia. Though Indonesia’s nature has enormous renewable energy potential, unfortunately, it has not been fully utilized with only 2.5% of its actual potential.

Indonesia has pledged to be committed to reducing carbon emissions by 29% in 2030 with local government efforts and 41% with international help. The plan is to develop green energy as a way to achieve the national primary energy mix target by 23% in 2025 and 31% in 2050 while the current contribution to national energy is 9.15%. Indonesia has an obligation to achieve a target in reducing greenhouse gas emissions by 314-398 million tons of carbon dioxide from the energy sector, as stated in the Paris Agreement. With all of these energy potentials and the commitment that Indonesia government has shown, why aren​’t more renewable energy sources being harnessed?

Unfortunately, the funding has always been the biggest challenge for RNE development in Indonesia. To solve this, Indonesian government has issued regulations about funding options, such as green bonds, through Lembaga Pengelola Investasi (LPI). This institution is in charge of planning, organizing, managing investments and reports directly to the President. LPI could be a new hope in clean energy development, especially in helping to mobilize funds within the country and from international crowds. LPI is expected to optimize the value of investment to support sustainable development.

However, the RNE development effort should not rely on one financing institution only. Indonesian government must be fully committed in planning clean energy projects in order to make the effort more effective in accelerating renewable energy development in Indonesia.


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