Becoming an Energy Transition Country Platform, Here is PT SMI's Preparation

The Government of Indonesia is strongly committed to dealing with climate change, and one of them is realized by the launch of the Country Platform ETM (Energy Transition Mechanism) with the Asian Development Bank (ADB) and PT Sarana Multi Infrastruktur (PT SMI).

The Government of Indonesia, through the Ministry of Finance, has officially appointed PT SMI as the country platform ETM manager to manage the funding and financing framework for the energy transition in the country.

Edwin Syahruzad, President Director of PT Sarana Multi Infrastruktur, admitted that he is optimistic that he can carry out this mandate well as SMI has had a number of experiences so far and has made a number of preparations to carry it out.

"PT SMI has formed a multi-division task force within PT SMI which includes a business team, product development team, legal team, risk team, and ESS team as part of our preparation to implement and manage this ETM platform," he said in Nusa Dua Bali. , Friday (15/7/2022).

In addition, he said PT SMI has started parallel discussions with several strategic partners ranging from donors/philanthropy, multilateral/bilateral institutions, and investors to explore the possibility of cooperation and support for the ETM platform. Because, he said, blended financing is the key in implementing the ETM platform.

Edwin explained that the launch of this country platform marked an important milestone for Indonesia as part of efforts to support the energy transition. He said he was proud that PT SMI was trusted as the country platform manager for ETM.

"Learning from our previous experience in managing the integrated blended finance platform SDG Indonesia One, we hope the establishment of this platform will also be successful," he said on the sidelines of the Soft Launching of Indonesia's ETM Country Platform, Nusa Dua, Bali, Thursday (14/7/2022) .

According to him, as ETM country platform manager, PT SMI will play a role including; coordination with stakeholders, compiling a comprehensive study related to fiscal support, formulating the concept of integrating fiscal support and de-risking facilities from other legitimate sources, as well as taking the necessary initial steps for the implementation of this country platform.

This is done with the aim of providing support for the energy transition through several products, namely refinancing, performance-based payments, energy transition subsidies, and acquisitions.

In addition, he continued, SMI will also identify appropriate mechanisms for ETM and provide support not only from the government budget but also to mobilize financing from partners, such as ADB and other potential partners.

"We encourage every interested institution to join us here to start discussions with us and explore possible collaborations to support the implementation of the Indonesia ETM Country Platform," he said.

Finance Minister Sri Mulyani Indrawati added, The ETM country platform is a major step that will enable the improvement of Indonesia's energy infrastructure and the transition of absolute clean energy towards net zero emissions in an affordable way.

This is because the country platform was created to provide the necessary financing to accelerate the national energy transition by mobilizing sources of commercial and non-commercial funding in a sustainable manner.

"This is really a technical challenge but also a financial one," she said.

Head of the Fiscal Policy Agency, Ministry of Finance, Febrio Kacaribu said that the launch of the Country platform was very appropriate, especially at the beginning of the G20 Indonesia Presidency meeting.

"This is an important momentum to encourage all members and other countries to carry out their climate finance commitments with real and implementable initiatives," he said.

ETM itself consists of two schemes.

First, the Carbon Reduction Facility (CRF) scheme is used for early retirement of coal-fired power plants (PLTU) in Indonesia.

Meanwhile, the Clean Energy Facility (CEF) scheme is intended to develop/invest in the construction of green energy facilities. This mechanism is expected to be a joint solution for the community, investors, the regional economy, and the environment.

According to him, to arrive at the implementation level, the arrangements in the mechanism must be well defined, including the participating institutions, financing instruments, challenges, and expected financial and economic benefits or losses. In this regard, the country platform accommodates the holistic approach required for ETM implementation.

"Country platform ETM will be one of the real deliverables in Indonesia's G20 Presidency. Indonesia will continue to strive to be an example for other countries and hopes that the same commitment can be implemented by other countries and development partners in the region and globally," closed Febrio.

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