Supporting investment in renewable energy and climate

Project Dates: July 2019 - July 2029
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Supporting investment in renewable energy and climate
PROJECT OBJECTIVE

The objective of the project is to strengthen the range of PT SMI's financing that directly contributes to the SDGs and to the fight against climate change, in order to promote sustainable and low-carbon growth in Indonesia. To this end, PT SMI has three tools: A credit line of up to USD 150 million to finance "climate" infrastructure projects: mitigation (e.g. small and medium scale renewable energy) and adaptation, in line with IDFC's common recommendations and principles for climate finance. 3.6 million euros of technical assistance from an AFD grant (0.6 million) and funds delegated by the European Union (3 million) to build PT SMI's capacity, assist in project identification and analysis, and support its gradual transformation into a universal development bank 2 million in investment grants, funded by the EU. These will provide additional financial support to projects with high social or climate impact that would not have been financed without this instrument (3-4 projects planned).

PROJECT DESCRIPTION

Despite sustained economic growth and rapid urbanisation, the lack of investment in infrastructure has had a strong impact on Indonesian growth over the past decade. The competitiveness of the archipelago is negatively impacted by inadequate infrastructure, especially transport and connectivity infrastructure, which affects businesses as well as urban and rural populations. Climate change could further impact the quality of Indonesia's infrastructure, with implications for growth, poverty reduction, foreign investment and the environment. While the country is one of the world's largest emitters of greenhouse gases (GHGs), Indonesia has committed to achieving carbon neutrality by 2060. To accelerate the implementation of this goal, the Ministry of Finance and PT SMI, a state-owned financial institution in charge of infrastructure development and an IDFC member since 2019, have launched the SDG Indonesia One Platform. This initiative, in which AFD is participating, aims to put in place the necessary tools to significantly increase the financing of projects that contribute to achieving the SDGs.


SECTORS OR AREAS OF WORK
  1. Climate finance
  2. Training/capacity building

Region/Location

BUDGET

USD 152,775,251

DONORS (OR FUNDING /CONTRIBUTING ORGANIZATIONS)
  1. AFD - Agence française de développement
IMPLEMENTING AGENCY OR AGENCIES

GOVERNMENT PARTNER
  1. Government of Indonesia
ADDITIONAL INFORMATION

For more information https//www.afd.fr/en/carte-des-projets/supporting-investment-renewable-energy-and-climate


BUDGET

USD 152,775,251

DONORS (OR FUNDING /CONTRIBUTING ORGANIZATIONS)
  1. AFD - Agence française de développement
IMPLEMENTING AGENCY OR AGENCIES

GOVERNMENT PARTNER
  1. Government of Indonesia