Jakarta, July 18, 2023 - Climate change and energy transition have become the world's most urgent and ambitious development agendas. The Paris Agreement, ratified by Indonesia, implies the need for tangible actions in climate change mitigation, adaptation, and financial support. Additionally, Indonesia has committed to achieving net-zero emissions by 2060.

The Education Fund Management Institute (LPDP) actively contributes by supporting sustainable energy transition initiatives. This is done by allocating investments from the Dana Abadi portfolio through environmentally conscious bonds or green bonds issued by companies and thematic bond issuances by the government.

This ensures that LPDP's investments consistently support sustainable financial ecosystems and national strategic projects, especially concerning energy transition issues. LPDP's investments also consistently align with the implementation of ESG & SDGs concepts in Indonesia.

"Indonesia must now transition from fossil fuels to renewable energy. Fossil fuels, besides being limited, are also environmentally unfriendly," stated LPDP's CEO, Andin Hadiyanto, during the opening of the investment seminar titled "LPDP's Role in Supporting National Energy Transition" on Tuesday, July 18, 2023.

The returns from LPDP-managed investments through Dana Abadi have contributed to providing master's and doctoral scholarships both domestically and internationally. LPDP has sent over tens of thousands of Indonesian youths abroad since it first offered scholarship services in 2013. These graduates are expected to become human resources for the management of renewable energy in the future.

The investment seminar on energy transition funding invited representatives from LPDP's strategic partners who have collaborated in conducting business processes focused on renewable energy. Among them were the Asian Development Bank (ADB), PT Sarana Multi Infrastruktur (SMI), and PT Pertamina (Persero), discussing green energy projects in terms of funding and governance.

At this investment seminar, LPDP also invited representatives from its strategic partners who have accompanied and collaborated with LPDP in conducting business processes leading towards renewable energy. These representatives included Andrew Fransiscus, Senior Program Officer, Asian Development Bank (ADB); Edwin Syahruzad, CEO of PT Sarana Multi Infrastruktur (PT SMI); and Emma Sri Martini, CFO of PT Pertamina (Persero).

Collaborative Funding Towards New Renewable Energy (EBT)

Discussing renewable energy funding in Indonesia is inseparable from ADB, chosen by the government to participate in the energy transition mechanism. ADB is an international financial institution committed to supporting financing in the fields of climate change and energy transition in the Asia-Pacific region. ADB's Senior Program Officer, Andrew Fransiscus, believes that LPDP's support for energy transition issues, particularly through investment instruments, has been on the right track. So far, the Asia-Pacific region has contributed more than 50% of global greenhouse gas emissions, and this figure is expected to continue growing.

"ADB itself has focused on providing financial support to accelerate the decommissioning of Steam Power Plants (PLTU) or support the development of clean energy investments and transactions with companies engaged in renewable energy," explained Andrew.

Andrew outlined that ADB's climate financing in Indonesia reached $670 million in 2022, divided into $530 million for mitigation and $140 million for adaptation. Additionally, as of July 1, 2023, ADB has mandated that 100% of sovereign operations (government funding) must align with the local government's commitments when ratifying the Paris Agreement.

Edwin Syahruzad, CEO of PT SMI, who attended as the second speaker, began by appreciating the Joint Cooperation Framework initiated by LPDP, agreed upon at the end of May. This agreement, covering investment cooperation, capacity-building, research funding, and exploring philanthropic fund distribution, has progressed and entered a new phase with the signing of the Preliminary Agreement for the Issuance of Investment Instruments during this event.

As an infrastructure financing company under the Ministry of Finance, PT SMI has undergone a transformation in financing orientation, including now towards the development of green energy. This transformation is due to PT SMI's status being appointed as the country platform for the Energy Transition Mechanism (ETM), including managing funding from ADB.

"I believe climate change is the most significant development and humanitarian issue of this century, alongside the pandemic. That's why we formed a financing division that prioritizes sustainability," said Edwin.

Pertamina's Openness to Sustainable Energy

The last presentation came from the CEO of PT Pertamina (Persero), represented by PT Pertamina's Finance Director, Emma Sri Martini. She explained that all countries are currently facing energy challenges to balance three aspects simultaneously: energy security policies, environmental sustainability, and affordable prices. On the other hand, Indonesia is considered to have significant natural resources potential to undertake renewable energy transition projects.

"These are areas that need research in terms of technology, improving human resources, and this becomes an area of collaboration that is expected to be explored further with LPDP, including research funds," explained Emma.

PT Pertamina eagerly awaits LPDP's entire business process, namely investments, research funding, and scholarships, to guide the national energy transition effort. Pertamina needs experts who support digitization, such as cybersecurity, cloud computing, and networking, AI & ML, big data, blockchain, and specialists in specific oil and gas fields such as CCUS (Carbon Capture, Utilization, and Storage), petrochemical engineering, sustainability, renewable energy, EOR/IOR Engineering, integrated reservoir models, and more.

The investment seminar held at CGV Grand Indonesia is part of the LPDP Festival 2023. Hundreds of invited guests filled the cinema seats at CGV, sparking enthusiasm during the Q&A session. The event, moderated by Marializia Hasni, was broadcast live on LPDP RI's YouTube channel and can be replayed to fully experience the session.