INTRODUCTION RENEWABLE ENERGY – BNI

TRAINING

RAYMOND BONA – SUSTAINABLE FINANCE SPECIALIST

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USAID Cooperation with Government of Indonesia
Individual Arrangement (IA) between Bappenas – USAID
USAID Environment Portfolio *)

• Water, Sanitation and Hygiene (TCA: Bappenas)

• Climate Change Adaptation & Disaster Resilience (TCA: KLHK)
• Clean Energy (TCA: ESDM)
• Terrestrial Biodiversity (TCA: KLHK)
• Marine Biodiversity and Sustainable Fisheries (TCA: KKP)

*) Under the Assistance Agreement (AA)No. 497-AA-030

 Aligning USAID Activities with Government of Indonesia’s
Targets

11% reduction in
25% of electricity from
energy sector 100% electrification
renewable resources
contribution to GHG ratio by 2020***
by 2025*
emissions by 2030**

* National Electricity Development Plan (RUKN) 2015-2024

** Nationally Determined Contribution, 2016
*** Government Regulation 79/2014 on KEN & Presidential Regulation 22/2017 on RUEN

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USAID Indonesia Clean Energy Development II Objectives
“ICED II Is a USAID funded
program, launched in May
2015 and will run through
May 2020, to support the
Government of Indonesia in
clean energy (renewable
energy and energy efficiency)
development for achieving
greenhouse gas emission
reduction and clean energy
access improvement.
This project is a continuation
of ICED I project
implemented from March
2011 to February 2015”
Improve Enabling Environment for Rapid Co-Investment in Clean Energy
To provide assistance and advisory services to the GOI in identifying and
overcoming gaps in energy planning and procurement frameworks/
processes within the energy sector. This includes formulating/refining
relevant regulations and policies and support for effective program
implementation.
Accelerate Mobilization of Private and Public Sector Co-Investment in
Clean Energy
To increase private and public investment from both domestic and
foreign funding sources into the clean energy market. This will result in
meeting the growing demand for energy, as well as energy access in
unserved areas by stimulating innovation and transfer of clean energy
technologies and know-how to Indonesia’s power sector.
Outreach on USAID and USG Inter-Agency Activities in Indonesia’s
Energy Sector
USG support for clean energy development in Indonesia is channeled
through multiple agencies and targets a wide range of operations within
the sector. ICED II provides a coordinating and facilitative role for USG
agencies active in the Indonesia market.
USAID Indonesia Clean Energy Development Approaches

Law, Policies, Electricity

Strategies, Installed RE Generation
Regulations, Capacity (MWh)
Plans (MW) Improved Energy
Program Services
Support
Investment
mobilized Project
Support
People Trained,
Clean Energy Implemented
Climate Change EE Projects

GHG Emission
Reduced (CO2)
Energy
Institutions Saved
Improved
Capacity
USAID Indonesia Clean Energy Development Targeted
results

• $120 M investment • $800 MM investment

Indicators

• 120 MW installed • 400 MW installed

• 4 MM tons CO2e avoided • 4.5 MM tons CO2e avoided
• 1.2 MM persons with access • 5 MM persons with access

2011 2015 2017 2020

ICED I ICED II

• $176 million • $730 million

Results

• 22 MW installed • 88.74 MW installed

• 75,600 tons CO2e • 4.01 million tons CO2e
• 202,400 persons with access • 752,629 persons with access
 USAID support to OJK Sustainable Finance Program

OJK Regulation &

Policy Development
Bali Center for Sustainable Guidelines in SF (POJK) The core of OJK program is
Finance (BCSF) Sustainable Finance issuing series of policy, including
Pilot Projects supporting documents such as
guidelines and SOP.
Capacity building
for FI and FI
Formalized
supervisors Policy
SF in OJK
structure Implementation
Second layer is implementing the
policy trough capacity building for
Industry awareness, pilot projects and
Information Hub & Participations monitor results
stakeholders
alignment
Policy Support
The last layer is policy support, all
activities to support both policy
development and implementation,
Participation in such as R&D, forum coordination
ASEAN
International Fora and industry engagement
Forums

Baseline survey, USAID ICED Support

Monitoring & Reporting
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 Linkage between capacity building to technical assistance
Individual Bank Training
Banks signed NDA with ICED, they start consultation
on their RE pipeline. ICED deliver individual bank
trainings to focus discuss on certain RE technology.
Outreach & Engagement
Banks & financial institutions had first contact
through OjJK ESRA trainings. OJK promoting ICED
support as donor incentives to banks & FIs
Financial Closure
Banks adopted recommendations.
Certain transaction has reached
Technical Assistance
financial closures
Deliver series of technical assistance and
advisory. Focus on technicality and
market insights. Deliver project memos
as output. Assist and monitor project
progress
Credit Enhancement
Introducing and exploring DCA partial credit
guarantee as credit enhancement mechanism.
USIAD had made 2 attempts in soliciting DCA, first
with Nusantara Infrastructure (portable credit
guarantee) and second Bank BRI (portfolio credit
guarantee)
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ICED Technical Assistance to Banks & Financial Institutions
Result as of June 2017

Banks and Financial Institution 13 Institutions

13 banks and financial institutions actively 65 Projects
received ICED technical assistance
499 MW
Clean Energy Projects US$ 662 million
46 Hydro; 1 Solar PV, 6 Energy Efficiency; and 7 Bio
Energy projects pipeline from banks & financial
institutions US$ 284
MILLION
Expected Installed Capacity (MW)
Megawatt installed capacity from projects pipeline

Expected Investment ($)

Total approximate investment needed

Financial Closed ($)

US$ million reach financial closed from assisted project
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 Example of ICED Technical Assistance for Banks and Financial
Institution
ICED Bank / FI Partners Technical Assistance Deliverables

 Mini Hydro Power Plant

 Biomass Power Plant

Project
 Biogas Power Plant ICED Project Memo

 Solar PV Project Pembangkit Listrik Tenaga Biogas

PLTBG ____________ – Lampung
ICED Project Memo !

 Wind Farm Project

ICED Project Memo !
Pembangkit Listrik Tenaga Mini Hydro
Project Sponsor : Bank BNI PLTMH ____________ – Sumatera Utara
Date Report : February 2012
Pembangkit Listrik Tenaga Mini Hydro
PLTMH ____________ – Jawa Barat
Project Sponsor : Bank BRI Syariah
Date Report : August 2012

Disclaimer
Project Sponsor : Bank BRI Syariah
Statements made by ICED-Tetra Tech relating to the information, and all surveys, forecasts, recommendations and opinions in
any report, presentation or deliverable are made in good faith on the basis of information available at the time. Forecasts,
Date Report : July 2012
recommendations and opinions are not representations, undertakings or a warranty as to outcome or achievable results. The
user therefore releases and discharges Tetra Tech from all liability, direct and indirect, in any way connected to the report,
presentation or deliverable

 Basic Project Description

Disclaimer

Statements made by ICED-Tetra Tech relating to the information, and all surveys, forecasts, recommendations and opinions in
any report, presentation or deliverable are made in good faith on the basis of information available at the time. Forecasts,
recommendations and opinions are not representations, undertakings or a warranty as to outcome or achievable results. The
user therefore releases and discharges Tetra Tech from all liability, direct and indirect, in any way connected to the report,
Disclaimer

 Check List & Assessment on

presentation or deliverable
Statements made by ICED-Tetra Tech relating to the information, and all surveys, forecasts, recommendations and opinions in
any report, presentation or deliverable are made in good faith on the basis of information available at the time. Forecasts,
recommendations and opinions are not representations, undertakings or a warranty as to outcome or achievable results. The
user therefore releases and discharges Tetra Tech from all liability, direct and indirect, in any way connected to the report,
presentation or deliverable
Outline Project Memo

Permitting / Licensing
 Review on Hydrology
 Review on Engineering Design
 Review on Technology Selection ICED Project Memo

ICED Project Memo

 Review on Equipment Specification

Pembangkit Listrik Tenaga Mini Hydro
PLTMH ____________ – Sumatera Utara
Pembangkit Listrik Tenaga Biomass

 Review on Cost and Investment

PLTBM ____________ – Kalimantan Barat
Project Sponsor : Danareksa Capital
Date Report : March 2012

 Review on Economic Feasibility

Project Sponsor : Nusantara Infrastructure
Date Report : September 2012

Disclaimer

Statements made by ICED-Tetra Tech relating to the information, and all surveys, forecasts, recommendations and opinions in
any report, presentation or deliverable are made in good faith on the basis of information available at the time. Forecasts,
recommendations and opinions are not representations, undertakings or a warranty as to outcome or achievable results. The
user therefore releases and discharges Tetra Tech from all liability, direct and indirect, in any way connected to the report,
Disclaimer
presentation or deliverable
Statements made by ICED-Tetra Tech relating to the information, and all surveys, forecasts, recommendations and opinions in
any report, presentation or deliverable are made in good faith on the basis of information available at the time. Forecasts,
recommendations and opinions are not representations, undertakings or a warranty as to outcome or achievable results. The

9/13/2018 FOOTER GOES HERE 11

user therefore releases and discharges Tetra Tech from all liability, direct and indirect, in any way connected to the report,
presentation or deliverable
 Example of ICED Capacity Building for Banks and Financial
Institutions
ICED Bank / FI Partners Activities Deliverables

 One or two days training

 Material are tailored to banks

Concept
needs
 Site visit to Mini Hydro
Projects
 Real case study

 Introduction to Mini Hydro

Power Project
 Key aspect in assessment
Hydro project proposal
Outline Training

 Due diligence check list for

Hydro project
 PPA and Legal aspect in
Hydro
 Risk assessment for Hydro
Project
 Lesson learn from
practitioner
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USAID ICED Publication on Sustainable Finance

2013 2014 2015 2016

2016 2016 2016 2016 2017 13

What is Renewable Energy projects in Indonesia

• Business model is an Independent Power Renewable Energy Project By

Producer (IPP) as a private company sells RE Technology (April 2018)
power generation to PLN by connecting to
PLN’s grid (‘on-grid’). IPP also called as project Wind SolarPV
sponsor or developer; Biomass /
Biogas
2% 2%
2% Hybrid
• Types of Renewable Energy (RE) technology are: 3%

Geothermal, Solar PV, Hydropower, Wind, Mini Hydro

5%
Municipal Waste, Tidal, Biomass & Biogas*) Geothermal
27%
• Majority of RE power plants (under development until
operation) in Indonesia are large hydro, followed by
geothermal.

• Financing an RE project requires 20-30% of Large Hydro

(>10 MW)
equity and 70-80% of loan 59%

*) Based on ESDM Regulation no. 50/2017 Source: Renewable Energy Division, Strategic Procurement
Directorate PLN presentation, April 2018
Why should banks finance RE projects

Status of Renewable Energy Project

• Renewable Energy contributes to 23% (45
Development (April 2018) GW) of energy mix in government’s target to
increase energy supply by 2025.
• OJK Regulation on Sustainable Finance no.
51/2017 mandates banks to internalise
Operating
environmental aspects by applying sustainable
23% finance principles. This will apply to BUKU II
banks in 2020.
Under
Development
61%
Construction
12%
• Based on PLN’s data, 61% of Renewable Energy
Projects in Indonesia are under development
phase (tender, study, initial fundraising,
PPA / In procurement)
Process of
Financing
4%
– Out of 70 RE project PPA signed in 2017, 66%
are in process of financing
Source: Renewable Energy Division, Strategic Procurement
Directorate PLN presentation, April 2018
How to Finance RE projects in Indonesia
• Baseline regulatotion is ESDM Regulation no. 49/2017 and no. 50/2017 ruled
for Power Purchase Agreement principles and maximum price of average cost
of generation (Biaya Pokok Produksi – BPP);
• Assess economical on the project, basic assumptions on revenue from sales
of electricity, investment cost and operating cost;
• Screen and conduct due dilligence on project’s current development stage to
determine the proper timing to start financing (e.g. enter during middle
stage).
• Understand electricity demand and supply in the targetted area, this can be
assess via PLN’s business plan (RUPTL) and Interconnection Study.
• Each RE technology has different characteristics, selecting the proper
technology based on location, resource assessment & technical aspects is
important.

National average
BPP 2017 =
7,66 cUSD/kWh
Who are the key players in a project?
• Independent Power Producer (IPP)  Initiator
and driving force during project
implementation. Usually establish a Special
Purpose Vehicle (SPV) to realise a project. The
IPP bears the commercial & technical risk,
operates and owns all assets of the project.
• Sponsor / Shareholders  Provides the
necessary equity capital to the IPP and hope to
receive a return on investment. These can be
entrepeneur/individual, medium-sized
entreprises, consortium, technology provider.
• Debt finance provider (bank / lender) 
provides loan financing to the IPP against
collateralisation based on assets and cash flows.
The aim is to receive money back plus some
interest rate, thus, bank/lender want to
minimise the risk of losing the money provided.
• Off Taker (PLN)  The only electricity
buyer for IPPs. The electricity sales are
guaranteed by the Ministry of Finance. PLN’s
main interest is in fast project completion
and stable supply of electricity at an
acceptable price. ESDM regulation 50/2017
mandate PLN to continuosly operate RE
power plant <10 MW (must-run).
• Regulator (ESDM)  sets the legal &
commercial framework. Typically focuses on
societal and/or macro-economic factors,
such as electricity access for all, etc.
• Others such as EPC/contractor, vendor/
machine supplier, and insurance/guarantor.
 26.9 PLTSa
Peluang investasi EBT masih terbuka & ekonomis 22.9
23.9 PLTBg
Potensi EBT masih sangat
33.4 besar,33.4
fokus di 13 wilayah prioritas 19.2
PLTBm
18.9
17.6 17.9 BPP setempat
33.4
POTENSI EBT
PLTP
26.9 26.9 PLTSa PLTSa cent$/kWh Giga Watt (GW)
13.133.4 33.4
33.4 33.4 PLTMH
22.9
23.9
22.9
23.9 PLTBg PLTBg
10.9 26.9setempat
100% BPP PLTSa PLTA
19.2 18.9 19.2
PLTBm26.9 PLTBm PLTSa 26.926.9 PLTSa
PLTSa 26.9 PLTSa
18.9
6 17.9
PLTP PLTP 22.9
23.9 PLTBg PLTB
22.94.9
23.9
22.9
22.9 PLTBg
23.9
23.9 PLTBg 85% BPP
PLTBg 23.9setempat
22.9 PLTBg
PLTMH PLTMH PLTBm 19.2 PLTBm
PLTBm PLTBmPLTBm
PLTS
18.9 19.2 18.9
18.9 19.2
19.2 18.9 18.9 19.2 18.9 19
17.6 17.9 17.6
17.6 17.9
17.9 PLTA 17.6PLTA 17.9 17.6 17.9 17.6 PLTP
17.9
PLTP PLTP
PLTP PLTPTotal
33.4
13.1 13.1
13.1
PLTB 13.1
PLTB
PLTMH PLTMH
PLTMH 13.1 PLTMHPLTMH
13.1
10.9
10.9 Babel PLTS
Maluku 10.9 N TBPLTS Riau
PLTA
Aceh Sulutenggo N TT
PLTA
PLTA
Sumut Kaltim
10.9 Kalbar Papua
10.9 26.9 PLTA PLTA
PLTSa
Total Total PLTB PLTB
PLTB 23.9 PLTBg PLTB
4.9 4.9 4.9 22.9 4.9 PLTB
4.9 KaltimPapua Kalbar PLTS PLTS
PLTS PLTBm PLTS
lutenggo
Aceh N TTSulutenggo
Sumut N TTKaltim Sumut
Kalbar Papua
PLTSa 18.9 19.2 PLTSa PLTS Total
14,18
11,14 12,41
9,77
17.6 Total
17.9 Total
Total PLTP
12,05 10,55
PLTP PLTP Total
13.1 PLTMH
N TB Babel
Riau
Babel MAceh
aluku
MalukuSulutenggo
N TBN TB Riau
NTTRiau Sumut
Aceh
Aceh Sulutenggo
Kaltim
Sulutenggo
Babel
10.9
Kalbar
NMTT
aluku
N TT Sum
Papua
N
Sumut
ut
TB Kaltim
Riau
Total
Kaltim Kalbar
Aceh
Kalbar Sulutenggo
Papua
Papua N TT
Total
Babel
Sumut Maluku
Kaltim NKalbar
TB Riau
Papua Aceh Sulutenggo N

10.98
9,01 14,45
12.64 1011.07 11,67 PLTA
Babel Maluku N TB Riau Aceh Sulutenggo N TT 12.94 Sumut Kaltim Kalbar Papua
12,28 8,50 9,92
7,66 16,62
19.36 PLTB
33.4 33.4 33.4
4.9
14,13 PLTS
1.36 1.36
0.08 0.08 26.9 Total
26.9 26.9PLTSa PLTSa
22.9
23.9
22.9
23.9
22.9
23.9 PLTBg PLTBg
Babel Sulselrabar
Maluku N TBKalselteng
Riau Aceh Sulselrabar Kalselteng
Sulutenggo N TT Sumut Kaltim Kalbar Papua
14,72
15.52 8,76 8.33
8,03 19.2 19.2 19.2
PLTBm PLTBm
8.59 18.9 18.9 18.9
17.6 17.9
17.6 17.9
17.6 17.9
12,51 7,45 6,83 PLTP PLTP
13.1 13.1 13.1 PLTMH PLTM
10.9 10.9 10.9
PLTA PLTA
PLTB PLTB
4.9 4.9 4.9
PLTS PLTS

“
Terdapat potensi EBT sekitar 210 GW Total Total
Pada 13 wilayah prioritas Babel M aluku
Babel Babel
MN TB
aluku Maluku
Riau
N TB NAceh
TB
Riau Sulutenggo
Riau
Aceh Sulutenggo
Aceh
N TT Sulutenggo
Sumut
N TT Kaltim
NSumut
TT Sumut
Kalbar
Kaltim Kaltim
Papua
Kalbar Kalbar
Papua Papua
yang keekonomiannya menarik 13,54
14.49 16,94
20.00 13,67
15.53
(BPP setempat > BPP nasional) 11,51 14,40 11,62
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Thank You

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