Future of Solar Energy in Indonesia Shines Bright: GGGI i

Investing in solar power is the most promising and practical green financing source in Indonesia, Global Green Growth Institute claims. (Antara Photo/Muhammad Adimaja)

By : Ratri M. Siniwi | on 4:38 PM September 21, 2016
Category : Business, Sustainability

Jakarta. As the Global Green Growth Institute’s Green Growth Program rolls into its second phase, the institute’s specialists emphasized that investing in solar power is still the most promising and practical green financing source in Indonesia.

"It is not only promising, but also very practical. It has a lot of growth potential because it’s quite easy to implement. It’s an easy, proven technology so nothing is going to scare investors away," GGGI Principal Green Finance Specialist Suki Atwal said at the 15th World Renewable Energy Congress in Jakarta on Tuesday (20/09).

As solar cell technology becomes more practical and simple, Atwal believes more solar power plants will be built in Indonesia in the near future, especially considering the abundance of sunshine the country is exposed to, and also its relatively low cost.

"Solar power will be one of the most dominating renewable forms of power productions going forward, especially in this part of the world," Atwal said.

In Indonesia, GGGI has piloted a number of projects to replace diesel with solar energy, or a mix of the two, in remote areas of Kalimantan.

"In parts of Indonesia where there is no access to the power grid, especially on the eastern islands, people are dependent on diesel, and diesel is expensive," GGGI Country Representative in Indonesia Anna van Paddenburg said. "This presents us with an opportunity to install solar cell plants which will reduce their energy costs significantly."

The institute revealed they are already working closely with the government to reach a target of 19 percent renewable energy by 2019.

GGGI signed a memorandum of understanding with state-owned enterprise Sarana Mukti Infrastruktur (SMI) on Sept. 7 during the Asian Regional Policy Dialogue in Jeju, South Korea, promising to provide SMI with technical expertise in project evaluation, especially in renewable energy projects.

Other projects GGGI has developed in Indonesia include land restoration in East Kalimantan.

"We are assessing the area to find out what commodity is best to grow there for the farmers, and help build back the ecosystem to benefit the local community and economy," van Paddenburg said.

Another focus area for GGGI is encouraging a more eco-friendly approach in developing Special Economic Zones and assessing what kind of intervention is best for each zone.

Although Indonesia has been one of GGGI’s most sought after project locations — especially with former president Susilo Bambang Yudhoyono taking on the mantle as its president currently, Atwal said Indonesia’s renewable energy development has been hindered by serious challenges in mobilizing private and institutional investors.

Among these challenges are the lack of a project pipeline, limited access to affordable capital, a relatively high perception risk, small deals but high transaction costs and limited financing.

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