OECD Bappenas Framework for industry’s net-zero transition: “Developing financing solutions in emerging and developing economies” Indonesia country stakeholder meeting, 6 December 2022, Jakarta, Indonesia

1. 1
AFD Group
#MondeEnCommun
AGENCE FRANCAISE DE DEVELOPPEMENT
AFD energy PORTFOLIO in Indonesia

2. 2
AFD Group
Updated strategy (2021)
Recent review of the strategy: 2 axes
1. Transformational support for energy utilities, with new financing tools
depending on the level of involvement in energy transition ;
2. Reinforcement of selectivity in energy infrastructure (stop financing fossil)

3. 3
AFD Group
Ongoing activities in Indonesia in the energy sector
Project (investment and/or
TA)
Description Budget
Timefram
e
Indonesia
Ongoing / starting / to be
launched TAs
• AFD- Risk of transition study
• AFD - Energy Efficiency in the Industry study with BAPPENAS
AFD - Grid reinforcement study for PLN
• AFD - Grant for partnering French Entities and Indonesian
stakeholders of the power sector
• AFD - Grant for JET and supporting long term trajectories
• AFD - EU Grant on Indonesia's Energy Transition
• AFD - ETP contribution
Results Based Loan, branded
“ETM” -INV
Results based loan to PLN to support the operator for fossil phase out 2023/2024:
• AFD (100-200 MEUR)
• ADB
• KfW
2023-2029
Energy DPL - INV Support necessary reforms to push RE in Indonesia 2023:
• AFD (100 MEUR)
• ADB
• KfW
Tbd
Banten - INV Preparation of a loan to PLN for the development of a 200 MW
windfarm in West Java
(AFD grant: 1.3 M€ for preparing complete Feasibility Study +
capacity building)
2023-2024: AFD (100-150 MUSD) 2024-?
Masang II - INV Preparation of a loan to PLN for the development of a 44 MW run-of-
river hydropower dam in West Sumatra Province.
(AFD grant: 1.2 M€ for preparing environmental and social studies
(ESIA & LARAP); DFID grant : 1M€ for feasibility study)
2023: AFD (140M€) 2023-2029
PT Sarana Multi Infrastruktur -INV Credit line for promoting investments related to Sustainable
Development Goals
(AFD grant: 600k€ for projects preparation; EU grants: 3M€ for
technical assistance and 2 M€ for investment).
2019: AFD (150MUSD) 2020-on
going
Jakarta II - INV Non-sovereign loan to support PLN for strengthening and improving
the efficiency of the electricity system in the Jakarta conurbation.
The project is part of Jakarta looping system project.
2014: AFD (100M€) 2015-on
going

4. 4
AFD Group
EE in the Industry study (EY + PETRORAYA)
©
Yashas
chandra
Excel-based model to simulate energy efficiency measures and their impacts on 8 industrial
sectors GHG emissions evolution
Main objectives
► Assist Bappenas with energy efficiency and
emissions mitigation modelling, capacity
building and modelling tool development.
► Enhance the capability of the Indonesian
ministries to formulate effective and impactful
mitigation strategies regarding energy usage
and GHG emissions in the Industry sector at short
and long term
Methodology
► Development of a database, including energy usage and GHG emissions of the key industries
► Development of a comprehensive and evolutive modelling tool with adapted key performance indicators to assess
the evolution of the Industry sector along time, regarding different mitigation scenarios
► Definition of a sound methodology, tools and procedures to allow local ministries efficiently operate the database
and modelling tool, to observe and assess the impact of different mitigations strategies in the Industry sector
► Capacity building approach with the Indonesian ministries, including knowledge, know-how and expertise sharing,
recommendations and suggestions to improve their competence and capability to develop realistic projection
Paper & Pulp
Textile
Iron & Steel
Food &
Beverages
Fertilizer
Chemical
Ceramic &
Glass
Cement
8 main industrial sectors

5. 5
AFD Group
Main outcomes of the work conducted
Main results
► Without any efficiency measures, energy consumption will skyrocket by
a factor of 8 and GHG emissions by 6
► Food & beverages, chemicals and textile will be the most energy-
intensive sectors in the coming years. It is important to focus on these
sectors to reduce energy consumption
► Electricity demand will increase in all scenarios with an expected
demand of ~450 Mboe in BAU and ~700 Mboe in HES in 2050
*Mboe = Million of barrels of oil equivalent (energy unit)
Decarbonization levers
► A rapid phase-out of coal is necessary to quickly reduce emissions of the
industrial sector
► Investments on energy efficiency should focus on new equipment
► Electrification is a major lever for reducing final energy consumption in
industry. Especially, in sectors characterized by low temperature demand
► The choice of electricity mix will strongly influence the level of GHG
emissions

6. 6
AFD Group
ETP Recommendations for Indonesia (1/2)
2. 2. Deliver EEP Development Capacity Building
-> to improve the technical capacity and environment for
local EE service providers to develop ‘bankable’ EEPs.
o Training will leverage MASKEEI’s existing Training &
Certification program on
▪ EE Market Awareness,
▪ ESCO Project Development for ESCOs,
▪ EE Project Finance for Local Financial Institutions
(LFIs).
1. 1. Develop, Implement and Finance Savings-Based Demonstration Projects
-> to create EE demand through an improved delivery environment for cost-effective and low-risk EEPs to
○ apply ‘global best practices’
○ bundle multiple ‘proven’ technologies in a ‘bankable’ investment grade audits
○ showcase monitoring and verification plans, EEP financing materials, performance-based
procurement procedures, project management and selection of a local contractor or ESCO to
implement the EEP
○ A relatively small fund (~USD 10 million) for 5-10 Demonstration EEPs across different industries
country’s energy transition.
MASKEEI, a national nonprofit Energy Conservation and Efficiency Society comprised of individual and organizational members with a mission to achieve
national energy security and resilience for sustainable growth through energy conservation measures.

7. 7
AFD Group
Recommendations for Indonesia (2/2)
3. Develop an ESCO Association
->to promote and improve communication and knowledge
sharing among ESCOs for an improved environment of
implementing low-risk projects to
o rebuild dormant ESCO trade association,
APKENINDO, with competent staff
o establish an industry platform
o create a 2-step certification program
4. A First Loss Fund for new Energy Savings Insurance Product
-> to accelerate project-based financing and investments of
projects in Indonesia to accelerate country’s energy transition.

8. 8
AFD Group
Thank you for
your attention
©
Erwan
Rogard
#MondeEnCommun
AGENCE FRANCAISE DE DEVELOPPEMENT