PT SMI Becomes Manager of Energy Transition Funding Source

The world is currently facing various challenges in various sectors caused by the Covid-19 pandemic, because it has an impact on social and economic conditions. Then, coupled with the current geopolitical situation, as well as the impact of climate change or climate change that can affect the economic conditions of all countries if not handled with a comprehensive solution.

All of these conditions certainly have an impact on Indonesia. The challenges that have come such as the Covid-19 pandemic have been able to be overcome by the Indonesian government well. This is evidenced by data from the Central Statistics Agencypl as of August 2022, Indonesia's economic growth throughout 2022 continues to show a positive trend of 5.44 percent (yoy) in the second quarter of 2022.

This is proof that the Indonesian economy has resilience to the conditions and shocks that occur. Currently, the government is also trying to overcome other challenges, namely efforts to overcome the impact of climate change in order to continue to meet the commitments to achieve the SDGs.

The proof and commitment of the Government of Indonesia is realized through Indonesia's participation in the Paris Agreement which is confirmed by the latest National Contribution Document or NDC, which targets the reduction of greenhouse gases (GHG) by 31.89 percent independently and 43.20 percent with international support to be achieved in Indonesia. 2030, as well as the Net Zero Emission target to be met by 2060.

Of course, in achieving this target, the Government of Indonesia needs and has identified several sectors that are critical for implementing strategic steps in overcoming the impacts of climate change. Some of these sectors include Agriculture, Forestry or Forestry and Other Land Uses (FOLU), Energy, Transportation and Waste Treatment.

Based on the studies and analysis conducted, one of the sectors that produces large Green House Gas (GHG) emissions is in the Energy sector, which is sourced from Steam Power Plants or PLTU, with an impact of up to 60 percent of the total carbon emissions produced. Therefore, the energy transition is the only way to reduce the production of these carbon emissions.

The energy transition will focus on phasing out or early decommissioning inefficient PLTUs and shifting energy needs to environmentally friendly energy. This is certainly not an easy job. To accelerate the steps of the Indonesian government, the Ministry of Finance has appointed PT Sarana Multi Infrastruktur (SMI) as the Energy Transition Mechanism (ETM) Country Platform Manager whose task is as a platform to manage various sources of energy transition funding in the country. "This decision was made through the Decree of the Minister of Finance Number 275 of 2022," said PT SMI President Director Edwin Syahruzad.

According to him, the appointment of PT SMI as ETM country platform manager cannot be separated from his previous success in managing the SDG Indonesia One blended finance platform, which was founded in 2018. The platform managed by PT SMI has succeeded in embracing 35 strategic partners to participate in funding projects aimed at achieving the SDGs in Indonesia.

"Hopefully, this ETM country platform will also be successful so that it can have a real impact on reducing carbon emissions in Indonesia through the energy transition agenda," he said.

PT SMI realizes the importance of cooperation and collaboration of all parties to support the success of the energy transition launched by the Government of Indonesia, through a blended financing scheme. "The aim is to support the implementation of the energy transition in order to provide a fair and affordable energy supply so as to achieve a strong, sustainable and inclusive economic recovery," he said.

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