Presentation by Ahmad Rifqi, OJK, Focus Group Discussion: Skill and Capacity Development to Support Clean Energy Finance and Investment, 15 October 2020

1. Financial Services Authority
Focus Group Discussion
Skill and capacity
development to support
clean energy finance and
investment
This document is prepared for FGD CEFIM – OECD with other ministries on 15th Oct 2020

2. TABLEOF
CONTENTS
The Process and Strategy to Develop Capacity
Building for Clean Energy Financing
03
Achievements Sustainable Finance (SF) Roadmap Phase
I (2015 – 2019) and Developing Phase II (2020 – 2024)01
02
Incentive to support Program of Battery – Based
Electrical Motor Vehicles
04 Appendix

3. Sustainable Finance Roadmap Phase I (2015 – 2019)
• The Roadmap sets out directions on Sustainable Finance for the
period of 2014 – 2019. The Roadmap focuses on increasing the
financial services institutions awareness of the importance of
sustainable finance in supporting businesses and in building a basis
for effective regulations
• Intended to assist FIs to strengthen their resilience and
competitiveness, especially in financing or investment for sustainable
project
SF Roadmap Phase I (2015 – 2019)
• SF Roadmap phase I has provide comprehensive and
accommodative regulatory frameworks and guidelines;
became the basis for participation in FIs, including Bank, Capital
Market and Non-Bank Institution in supporting Indonesia's
commitment to SDGs and climate change (a low carbon
economy)

4. COLLABORATION04
POLICIES
REGULATION
AWARENESS03
02
01
Institutional Collaboration (Ministries/Institutions, Universities, and Research Institutions)
Ministries/Institutions (K/L): Ministry of National Development Planning, Ministry of Finance,
Ministry of Environment and Forestry, Ministry of Agriculture, Ministry of Energy and Mineral
Resources, Ministry of Industry, Ministry of Economic Affairs, Ministry of Maritime Affairs and
Investment, Ministry of Social Affairs, Ministry of Transportation, BIG, BNPB.
Other Institutions: IFC, USAID, GIZ, UNDP, WWF Indonesia, IDH, UNESCAP, UNIDO, GBCI
Universities/Research Institutions: Gadjah Mada University, Padjajaran University, Indonesia
University, IPB University, Trisakti University, Udayana University.
.
1. Capacity building – Sustainable Finance Training (internal and external); 53
batches (basic, intermediate and TOT levels);
2. Guide Book for Sustainable credit/financing in the Plantation Sector and Oil Palm
Industry, Clean Energy, Energy Efficiency, Green Building and Organic Agriculture
under the sharia scheme.
1. POJK Number 51 /POJK.03 / 2017 Sustainable Finance
2. POJK Number 60 /POJK.04 / 2017 Green Bond
3. KDK Number 24 / KDK.01 / 2018 regarding 25% Cost-reduction Incentive on
registration fee and green bond registration statement
4. Technical Guidelines for Banks for the Implementation of POJK 51 (voluntary)
1. Implementation of the 8 Principles of Sustainable Finance;
2. Action Plan for Sustainable Finance (or RAKB);
3. Allocation of Social and Environmental Responsibility Fund (TJSL); and
4. Sustainability report.
Achievements of Sustainable Finance Initiatives in Indonesia
Sustainable Finance Roadmap Phase I (2015 – 2019)

5. • Sustainable Finance Roadmap Phase II will
focus on building the Sustainable Finance
Ecosystem; strengthening the implementation
of management of environmental, social, and
governance (ESG) risks by Financial Services
Institutions (FSIs), as well as boosting
innovation and developing financial services
and products in order to support the
achievement of Sustainable Development
Goals (SDGs) and Paris Agreement.
• Capacity Building become one of the sub
ecosystem
Sustainable Finance Roadmap Phase II (2020 – 2024)

6. The Process of Capacity Building in Clean Energy
In conducting specific training programs on RE and EE,
OJK collaborated with relevant ministries/institutions.
Ministries: Ministry of Energy and Mineral Resources
(KESDM) and Ministry of Environment and Forestry
(KLHK) to prepare materials on policies to respond to
energy and environmental issues.
International Organizations: USAID, UNIDO, and IFC.
2
• Since 2014, OJK has held several capacity building
programs to increase awareness and support the SF
initiatives in Indonesia.
• Need assessment study (for bank) à Energy
Sector become priority
• Actually, there have been 53 batches of training
activities of which 1.050 employee from internal and
external.
The Goal of Capacity Building:
To enhance FIs awareness and understanding of the
category of sustainable business activities in order to
increase FIs portfolios on activities related to
renewable energy (RE) and energy efficiency (EE).
About Training:
• The training consists of 3 different levels; basic,
intermediate, and training of trainers (TOT).
• Each level involves a pre-test and a post-test for the
participants. Each training is usually completed in 4
(four) days and includes case studies and field trips.
The Focus of Training Programs:
• Policies and regulations concerning SF.
• Management of environmental and social risks and
renewable business sectors, such as RE, EE, and
sustainable agriculture/plantation.
1
• Department of Human
Resources (for internal)
• OJK Institute (for external)
3
• Training modules on RE and EE
for banks
• Guideline for Energy Efficiency
Project Financing.
• Traning for FIs, green building,
mini-hydro, micro-hydro, and
biogas.
• Still develop integrated training
module to bank. Capital market
and Non-bank institution
4
In monitoring and evaluation training programs, OJK
communicates with FIs to discuss some challenges when
it comes to financing in the energy sector.
Major challenge: lack of collateral & develop innovative
financing
Solution: OJK has coordinated with the KESDM, PT SMI,
and Ministry of National Development Planning
(Bappenas) to come up with innovative schemes to
support financing in the energy sector.
5
Start to develop Capacity Building Collaboration Training Division
Training Module M&E

7. Strategy to Develop Integrated Financial Components in
Training for Energy Sector
Innovative financing to development
schemes of de-risking projects:
OJK is supported by some experts to
develop such innovative schemes.
Real program initiatives will be
developed in cooperation with Bappenas,
KESDM, and international organizations.
In conducting training, OJK
always involves stakeholders
to provide information on key
success in financing and real
program/project.
OJK continuously encourages
FIs to disburse
financing/credits on the
energy sector by preparing
information infrastructures,
such as guide book and
incentives.
OJK has recently launched an
incentive to ease lending rules
for the purchase of electric
vehicles and on business loans
linked to their manufacturing
in a bid to boost investment in
the sector.
The incentive is given for loans
granted to buyers of electric
vehicles, as well as for related
industries manufacturing
components and batteries.
The evaluation of the effectiveness of training programmes: there is a need
for innovative financing initiative that involves relevant Ministries/Institutions.

8. BANKING CAPITAL MARKET
NON BANK FINANCIAL
INSTITUTIONS
§ Sustainability Bond
§ Green Loan/Financing:
syndicated loan or innovational
financing that uses Green
Climate Fund such as green
building, ecotourism,
renewable energy, efficiency
energy, organic farming,
sustainable infrastructure.
§ IPO (sustainability bond,
green bond/sukuk, etc)
§ For infrastructure financing
(bonds and sukuk, RDPT, KIK
EBA, asset-backed securities
/participation letters, DIRE,
DINFRA);
§ Equity Crowdfunding
§ Pension Fund: Sustainability
bond – pension fund, green
investment.
§ Financing Institution: financing
to environtment friendly
MSMEs.
§ Microfinance: financing for
organic farmers.
§ Insurance: insurance for
fishermen/farmers, climate risk
insurance, etc.
The perspective of sustainable financing development

9. INCENTIVES TO SUPPORT PROGRAMS OF BATTERY- BASED ELECTRIC
MOTOR VEHICLES (KBL BB)
1. Providing funds to debtors to purchase battery electric vehicles and or
developing the upstream industry from battery electric vehicle (battery
industry, industry charging station, and component industry) could be
categorized as compliance with the provisions of the implementation of
sustainable finance.
2. Providing funds for the production of battery electric vehicles along with
the infrastructures could be categorized as a government program that
gets an exception of the Maximum Credit Limit (BMPK) if guaranteed by
guarantee financial institutions/state-owned or regional-owned
insurance companies.
3. Credit quality assessment for the purchase of battery electric vehicles
and or upstream industrial development from battery electric vehicles
with a ceiling of up to IDR 5,000,000,000.00 could only be based on
payment accuracy of principal and or interest.
4. Credit for the purchase of battery electric vehicles and or upstream
industrial development from battery electric vehicles to individuals or
small-micro business entities could subject to a risk weight of 75% in the
calculation of Risk-Weighted Assets (RWA).
……… effective from Oct 1 th 2020……
Related incentives in line with OJK Regulation Number
51/POJK.03/2017 concerning the Implementation of
Sustainable Finance for Financial Institutions, Issuers,
and Public companies, which describes FIs, Issuers, and
Public Companies that implement sustainable finance
effectively could be given some incentives from OJK,
such as to be included in capacity building programs or
be involved/rewarded in the sustainable finance award

10. +62 21 2960 0000
OJK Contact 157
humas@ojk.go.id
www.ojk.go.id/sustainable-finance
Contact Us

11. Appendix
TataKelolaAspekResiko
Sosial&LingkunganHidup
PAKET PELATIHAN
Keuangan Berkelanjutan dalam Pembiayaan Energi Bersih
RangkumanPeraturanMengenai
DokumenLingkunganHidup&EnergiBersih
PAKET PELATIHAN
Keuangan Berkelanjutan dalam Pembiayaan Energi Bersih
PembiayaanPembangkitListrik
TenagaMiniHidro
PAKET PELATIHAN
Keuangan Berkelanjutan dalam Pembiayaan Energi Bersih
PembiayaanPembangkitListrik
TenagaSurya
PAKET PELATIHAN
Keuangan Berkelanjutan dalam Pembiayaan Energi Bersih
PembiayaanPembangkitListrik
TenagaBiogas
PAKET PELATIHAN
Keuangan Berkelanjutan dalam Pembiayaan Energi Bersih

12. OJK closely cooperates with international organizations, such as IFC, UNDP, USAID, WWF Indonesia, IDH, GIZ and
other organizations to exchange information and leading practices that are needed to further promote
sustainable finance in Indonesia. To strengthen our cooperation, OJK has signed MoUs and agreements on
different areas with several international organizations.
As part of our cooperation, sustainable real programs have been run to give direct impacts to the community, such as
programs on agro-ecotourism of BIOFIN UNDP with BCSF (Bali Center For Sustainable Finance – Udayana
University), aquaculture with IDGH, innovative financing for ISPO/RSPO certifications for palm oil farmers in West
Kalimantan, etc with WWF Indonesia.
Appendix
Cooperation with
International Organizations
As regulated by OJK Regulation Number 51/2017 and Technical Guidelines on the
Implementation of OJK Regulation Number 51/2017 for banks, one sustainable finance
implementation priority is banks’ portfolios on financial instruments or projects that are in line
with sustainable finance.
Banks’ portfolios on RE
and EE
OJK published guideline for credits/financing disbursement on sustainable sectors, such as plantation
and palm oil sector, renewable energy, energy efficiency, green building, and organic agriculture under
sharia scheme.
To increase awareness of the implementation of sustainable finance, OJK also conducted training and
capacity building programs for FIs.
Increasing awareness through publication of guide
books and capacity building programs for FIs

13. INDONESIA SUSTAINABLE BUSINESS ACTIVITIES
Indonesia’s Principles of Sustainable Finance
Eight Principles of Sustainable Finance
1
Responsible
Investment
Sustainable strategy
and business practices
2
Management of social
and environmental
risks
3
Governance
4
Informative
communication5
Inclusive
6
Developing priority
leading sectors
7
Coordination and
collaboration
8
Sustainable Business Activities
Small Micro Medium
Enterprises

14. 2016 2017 2018
Renewable Energy 9.510.214 10.153.067 10.667.511
9.510.214
10.153.067
10.667.511
8.500.000
9.000.000
9.500.000
10.000.000
10.500.000
11.000.000
Renewable Energy
2016 2017 2018
Efficiency Energy 6.241.108 8.108.071 8.582.848
6.241.108
8.108.071 8.582.848
-
2.000.000
4.000.000
6.000.000
8.000.000
10.000.000
Efficiency Energy
2016 2017 2018
Recycling
Industry
1.207.667 1.418.462 1.509.923
1.207.667
1.418.462 1.509.923
-
500.000
1.000.000
1.500.000
2.000.000
Recycling Industry
2016 2017 2018
Sustainable
Agriculture
78.835.289 90.966.974 108.575.639
78.835.289
90.966.974
108.575.63
9
-
20.000.000
40.000.000
60.000.000
80.000.000
100.000.000
120.000.000
Sustainable Agriculture
2016 2017 2018
Sustainable
Fisheries
1.063.297 1.157.427 1.231.899
1.063.297
1.157.427
1.231.899
950.000
1.000.000
1.050.000
1.100.000
1.150.000
1.200.000
1.250.000
Sustainable fisheries
2016 2017 2018
Sustainable
Forestry
1.926.303 2.101.905 2.219.952
1.926.303
2.101.905
2.219.952
1.700.000
1.800.000
1.900.000
2.000.000
2.100.000
2.200.000
2.300.000
Sustainable Forestry
2016 2017 2018
Eco Tourism 11.000 13.000 16.000
11.000
13.000
16.000
-
5.000
10.000
15.000
20.000
Eco Tourism
2016 2017 2018
Green Building 2.000.355 3.668.815 3.955.701
2.000.355
3.668.815 3.955.701
-
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
Green Building
2016 2017 2018
Green
Infrastructure
1.746.988 413.349 488.417
1.746.98
8
413.349 488.417
-
500.000
1.000.000
1.500.000
2.000.000
Green Infrastructure