Investor Presentaiton
RENEWABLES FUND
Legal framework and institutional capacity are deemed as main
challenges to implement DET
.
The idea to collect taxes from fossil fuels such as coal and oil
PT SMI
will likely be stumbled by the legal framework. No regulations Experience in structuring projects and
are currently in place to allow its implementation.
METI sees BKF's proposal to put the fund in the Environmental
Fund Management Agency or Badan Pengelolaan Dana
Lingkungan Hidup (BPD LH) controlled by the Ministry of
Environment and Forestry could create competition between
the renewables and land use agendas.
The proposal to use PT SMI as the creditor, which will disburse
the fund to target groups, has also prompted a question about
PT SMI's capability in playing this role. Many perceive PT SMI
lacks the experience and capacity in renewables projects. The
lack of resources to assess all potential projects at the same
time would also be a concern for PT SMI.
IESR (Institute for Essential Services Reform) | www.iesr.or.id
providing funding (+)
Capable in collecting domestic and
international funding (+)
Accredited by Green Climate Fund (+)
Technical support from international
organizations (+)
Flexible financial instruments (+)
Transaction costs for small-scale projects are
not economical (-)
Susceptible to risks of renewables projects (-)
Small portfolio in renewables sector (-)
Source: BKF, 2018
BPD LH
Under government control (+)
High governance standard aligned with laws
of Public Service Agency (BLU) and state
finance (+)
Flexibility in issuing financial instruments (+)
Current donors prioritize land use issue not
energy issues (-)
Limited capability in derisking (-)
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