Indonesia and China share their respective decarbonisation journeys and challenges with green financing.
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The keynote session on "Securing Green Financing for a Net Zero Future" featured Rachmat Kaimuddin, Deputy Minister for Infrastructure and Transportation Coordination, Coordinating Ministry of Maritime Affairs and Investment, Republic of Indonesia, and Li Rui, Chief Executive Officer of Guangzhou Power Supply Bureau. The two speakers shed light on the intricacies of green financing and the transition towards a sustainable future.
Deputy Minister Kaimuddin opened the SIEW Summit Session 3, Securing Green Financing for a Net Zero Future with the statement that "money is never the problem. The world has enough money for anything." What he felt was needed is to "think about what the problems are faced by each country".
He emphasised the significance of understanding the unique challenges faced by each country. For Indonesia, a developing nation with limited fiscal capacity, he said the focus is on areas such as transmission, early retirement of outdated infrastructure, and the development of renewable energy sources—all of which require different types of financing.
Deputy Minister Kaimuddin also highlighted that investments in the energy transition must not jeopardise the financial stability or investor confidence in the State Electricity Company or the broader Indonesian government. Changes in the energy system also require political consensus across various stakeholders, including ministries, the National Energy Council, Parliament, and the President.
He shared three key lessons and recommendations from Indonesia's decarbonisation journey:
Solutions must be tailored. Deputy Minister Kaimuddin emphasised that there is no cookie cutter solution as each country is different. Indonesia cannot apply 100 percent of the solutions from developed nations. Collaboration is essential for sharing best practices and available technologies.
No silver bullet. He pointed out that no single technology is capable of addressing the climate crisis entirely. He stressed that any solution that reduces emissions should be considered, acknowledging that diversity is key.
Incentivise green projects. Deputy Minister Kaimuddin highlighted that most financing flows towards commercially viable projects. To drive sustainability, the focus should be to make green projects more attractive through incentives and low-cost financing.
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Mr Li spoke about the digitalisation and greening of the power grid as vital aspects of the energy transition. Some projects that the Guangzhou Power Supply Bureau has undertaken include the first China-Finland cooperative energy project utilising geothermal storage solutions and solar thermal heating systems. This has resulted in a 200 tonnes/year reduction in emissions. Other noteworthy achievements include the launch this year of China's first electric hydrogen smart energy station which helped reduce emissions by 10 tonnes/year, as well as the invention of green equipment.
With regard to green financing, Mr Li said the Bureau has extended financial leasing, green funds, carbon asset management, and green insurance for various projects, amounting to a cumulative total of US$12.6 billion.
Summing up the discussion, Deputy Minister Kaimuddin stressed the paramount importance of collaboration and tailoring financing solutions to the unique needs of individual countries. On the other hand, Mr Li underscored the significance of establishing a green finance system in line with international standards, facilitating exchanges, and knowledge sharing.
These insights from two countries with different circumstances serve as a testament to the flexible and diverse approaches required to achieve a sustainable energy future. Collaboration, adaptability, and a focus on promoting environmentally friendly projects will be key to supporting the energy transition.
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