Indonesia is lagging far behind in terms of infrastructure, especially in the energy sector. This is one of the consequences of the 1997 Asian financial crisis and the resulting drastic reduction in investment.
The government has made strong commitments towards catching up, while at the same time seeking to preserve the country’s natural environment. A 15-year action plan was laid out in 2011. With Indonesia being the fifth-largest emitter of greenhouse gas, the government also committed to a policy of reducing its impact on the climate. Developing the country’s huge renewable energy potential (more than 160 GW) was identified as a priority.
A partnership approach
With this in mind, in 2015, Agence Française de Développement (AFD) and the British Department for International Development (DfID) began supporting the efforts of the public financial institution PT Sarana Multi Infrastruktur (PT SMI) in financing infrastructure projects which contribute to reducing climate change and adapting to its effects.
A total of six projects were backed. What impact did they have? The answer lies in three key figures!
- 158,000 people in the region of Cilegon, on the island of Java, have better access to drinking water thanks to the construction of a water treatment plant near the city. A reservoir has also been built downstream from the Cipasauran river, preventing saltwater intrusion and contamination of fresh water.
- 18,000 t CO2e/year is being avoided through the extension of a hydroelectric power station in the Bengkulu province, on the island of Sumatra. This extension is an addition to a 16.5 MW facility, thus increasing its capacity to 21 MW.
- 102 GWh of electricity will be generated each year by two newly-constructed biomass plants, equivalent to the consumption of a city of 20,000 inhabitants in France. The majority of this electricity will be used to supply two sugar processing plants in the east of the island of Java, with the remainder being sold on to the local electricity company.
A positive outcome
Figures aside, the project has boosted the capacities of our partner PT SMI in several areas: identifying projects, enhancing technical studies for applications and developing technical and financial skills within their teams in renewable energy projects or those beneficial to the climate.
A positive outcome, shared by PT SMI: “Our partnership with AFD has helped us to take major steps towards becoming the financial institution for development in Indonesia. AFD has provided us with a range of support measures, not only financial, but also in terms of expertise, tools and methods which will help PT SMI to explore new frontiers, especially in the renewable energy sector”, said Darwin Trisna Djajawinata, Director of Project Development and Consultancy at PT SMI.