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Minister Arifin Reveals Indonesia’s Energy Transition Funding At 2023 WEF

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A file photo of At The 2023 World Economic Forum In Davos, Minister Arifin Reveals Indonesia's Energy Transition Funding

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Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif attended the 2023 World Economic Forum (WEF) which was held in Davos, Switzerland. In his opening speech at the “Fast Tracking Energy Transition Investment in Developing Economies” Workshop, Minister Arifin conveyed Indonesia’s agenda in energy transition and achieving the Net Zero Emission target in 2060 or sooner.

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The Indonesian government has set a target to limit global temperature rise to below 2 degrees Celsius, 1.5 degrees Celsius wherever possible, compared to pre-industrial levels, in accordance with the Paris Agreement. “This number seems small, but it can create massive transformations, such as the industrial revolution and technological innovation that will bring momentum to economic growth,” said Arifin on Tuesday (17/1) local time.

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Arifin also realizes that each country’s ability to achieve the set targets is different, but he emphasized that the Indonesian Government’s commitment remains the same. “Years have passed, but our commitment, the Indonesian government, remains the same. We realize that each country’s ability to achieve the targets set in the Paris Agreement varies, depending on the situation of each country and the availability of potential resources in that country. That is, Therefore, the path taken will also be different, considering the aspects above,” he explained.

According to Arifin, setting strategies, programs, and targets toward an energy transition is easier. The biggest challenge is the real implementation towards the energy transition and ensuring the affordability of energy by the people. “The most difficult part is the concrete implementation towards the energy transition, ensuring the affordability of energy by the people, accessibility, and decarbonization which takes place in a relatively short time,” said Arifin.

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Arifin also realizes that Indonesia, as well as many other countries, especially developing countries, still rely on fossil energy sources. Therefore, to achieve the energy transition target, the use of renewable energy sources is important.

“In such conditions, high commitment and a strong spirit of collaboration are needed, so that no community is left behind, especially those who are still dependent on fossil energy. The earth where we live has provided so many sources of EBT, it is our responsibility to take advantage of existing resources for the benefit of the people,” he continued.

Arifin also stressed the importance of minerals as supporting materials that are important for the industry for the energy transition. “I believe that we need to pay more attention to optimizing these mineral resources, including in the processing phase,” said Arifin.

NZE 2060 Target Funding Mechanism

On this occasion, Arifin also said that in order to achieve the ambitious target of reducing emissions, a large funding capacity was also needed. Not all countries have the capacity for that. Developed countries, developing countries, and underdeveloped countries have different capabilities in funding.

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“Here we need help and support from financial organizations to create a global balance through mobilizing funding with a mechanism that is simple and easier to understand so that it is accessible and affordable for all,” said Arifin.

Arifin also explained that Indonesia has set a detailed roadmap that requires an investment of USD 2.5 trillion, of which more than half will be absorbed by the energy sector.

“Can you imagine or not, how much money do we need to achieve Net Zero Emissions globally? In 2022, in Indonesia, investment realization is USD 1.97 billion, while the total investment plan until 2025 is USD 57.9 billion until 2030 is USD 125.9 billion, there is an additional investment of USD 68 billion from 2025,” said Arifin.

At the end of his opening speech, Minister Arifin also invited investors to support Indonesia’s efforts to carry out the energy transition and Net Zero Emissions, as well as open opportunities for collaboration with partner countries and international organizations. “We are very happy to be able to discuss with the audience,” said Arifin.

For information, WEF 2023 carries the theme “Cooperation in a Fragmented World”, and is attended by more than 2,700 participants including 50 heads of government, 1,500 business people, as well as world-renowned academics, civic activists, and artists. The annual WEF event which brings together decision-makers in the public sector and the private sector will be held on 16-20 January 2023.

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The “Fast Tracking Energy Transition Investment in Developing Economies” workshop includes the agenda at the Indonesian Pavilion which is held as a series of events at the WEF Annual Meeting which is often attended by delegates from the Republic of Indonesia, both Ministries, companies, and institutions, to enliven and voice Indonesian culture on the global stage. The Indonesian Pavilion will be held on 16-20 January 2023, which aims to provide a means for all Indonesian and international delegations to interact, hold meetings, attend workshops organized by various ministries and private companies.

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