Jakarta: British International Investment (BII), the UK’s development finance institution and impact investor, announced a USD15 million (over Rp200 billion) commitment in Southeast Asia including Indonesia to provide investment capital needed to boost clean and sustainable economic growth as well as green energy transition. This commitment is a great step towards UK’s support on Indonesia Just Energy Transition Partnership (JETP) which was launched last year at G20 in Bali.
BII’s first investment in the region is expected to attract more capital to support Indonesia in reaching net zero emissions by 2060. This commitment will be implemented through SUSI Asia Energy Transition Fund (SAETF), a Southeast Asia-focused energy transition infrastructure fund managed by Swiss-based firm SUSI Partners, with a proven track record of investing globally across the energy transition infrastructure spectrum.
In Indonesia, the firm has invested in the development of run-of-river hydropower and wind projects via a joint venture between SAETF and regional developer Pacific Impact. It reiterates the renewed approach to investing in climate finance in Indonesia as one of BII’s priority markets in Southeast Asia.
The investment marks the start of realising BII’s ambitions to invest up to 500 million poundsterling of climate finance in the Indo-Pacific region. Furthermore, with this commitment, BII joins other development finance institutions, including AIIB, FMO, Swedfund, Norfund, and OeEB, as well as private investors in backing SAETF.
“In the margin of G20 Leaders Summit in Bali last year, Prime Minister Rishi Sunak joined other world leaders to launch Indonesia Just Energy Transition Partnership (JETP). This country-led partnership will not only help Indonesia pursue an accelerated just energy transition, away from fossil fuels and towards renewable sources, but will also help support economic growth, new skilled jobs, reduced pollution and a resilient, prosperous future for Indonesians,” said British Ambassador to Indonesia and Timor Leste Owen Jenkins, as stated in UK.Embassy Jakarta statement, Monday 22 May 2023.
“I am delighted to see British International Investment’s extended offering to the Indo-Pacific region as this investment will also support Indonesia to accelerate its transition away from coal as part of the country’s commitment to its 2060 net zero target. The UK remains committed to work in partnership with Indonesia to deliver those promises,” he added.
SAETF targets infrastructure investments across the energy transition spectrum, including renewable energy, energy efficiency and energy storage projects and focuses on emerging economies in Southeast Asia, including Indonesia. The Fund will contribute to global climate mitigation goals and the Paris Agreement by financing clean energy solutions, increasing the supply of reliable and affordable electricity for businesses and consumers, and enabling access to clean energy solutions in underserved areas.
To address the growing energy demand and reduce dependence on fossil fuel generation, Indonesia has already committed to reaching net zero emissions by 2060 or before.
The region’s sustainability ambitions require at least USD200 billion of energy sector investment by 2030, of which over three-quarters needs to be channeled into clean energy. Consequently, BII’s investment is also aimed at attracting further commercial investors to unleash climate finance opportunities and support green, resilient economic growth in the region including Indonesia.
“Energy demand in Southeast Asia is growing fast in line with the region’s economic development. Our goal is to direct capital towards the buildout of infrastructure that allows this growth to occur in a sustainable manner while proving that Southeast Asia is not just an impactful but a highly attractive market for public and private investors alike,” Wymen Chan, Head of Asia at SUSI Partners said.
While Srini Nagarajan, Managing Director and Head of Asia at BII added: “We have been investing across Asia for over 30 years. SAETF is an excellent re-entry point for BII into Southeast Asia and a clear statement of our ambition to provide climate finance and support innovation to meet the challenges from the climate crisis. We laud the region’s climate ambitions and look forward to collaborating with SUSI’s local teams to further develop scalable and bankable sustainable projects.”
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