BIAC-OECD Virtual Roundtable on mobilising private sector finance and investments for affordable and clean energy in developing countries, 26 October 2021

1. SDGS FINANCING HUB
AS INNOVATIVE FUNDING SCHEME
26 October 2021
Dr. Ir. Yahya Rachmana Hidayat, MSc
Director of Energy, Mineral, and Mining Resources
Ministry of National Development Planning/Bappenas
OECD Virtual Roundtable on Mobilizing private sector finance and investments for
affordable and clean energy in developing countries.

2. SDGs Financing Gap During COVID-19
2
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
BAU 2,401 2,714 3,044 3,397 3,791 4,197 4,654 5,153 5,708 6,321 6,996 7,721
Moderate 2,401 2,778 3,250 3,723 4,284 4,876 5,491 6,113 6,813 7,586 8,458 9,405
High 2,401 2,867 3,436 3,945 4,556 5,212 5,862 6,581 7,386 8,278 9,281 10,397
-
2,000
4,000
6,000
8,000
10,000
12,000
864
1,444
904
1,431
3,633
5,514
3,680
5,719
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Moderate High Moderate High Moderate High Moderate High
Government Non-Government Government Non-Government
2020-2024 2025-2030
The
gap
is
getting
bigger
due
to
the
COVID-19
pandemic
SDGs Financing Needs by Scenario
Financing Gap
Sumber: Direktorat Perencanaan Pendanaan Pembangunan, Bappenas (2020)
The financing needs of Indonesia's SDGs are
grouped into 3 Scenarios
• The 3 scenarios are: (i) business as usual; (ii) moderate
intervention; and (iii) high intervention.
• 3 The scenario is based on the assumptions: Economic
growth, Inflation, Exchange Rate, Population, Tax Ratio,
PNBP, and deficit.
Rp
Trillion
Need for Innovative Funding
Schemes to address the Gap
Rp
Trillion

3. Innovative Funding Development Plan for SDGs
through SDGs Financing Hub
2015 2017
The SDGs:
Commitment to implementing
SDGs at the global and
Indonesian levels
The Addis Ababa
Action Agenda:
Inviting all parties to be
involved in funding the
SDGs
Presidential Regulation
59/2017 regarding the
Implementation of TPB
Achievements:
Bappenas as coordinator of
SDGs implementation and
also coordinator of SDGs
funding sourced from the
state and other sources
• Development of
innovative funding
schemes for the SDGs
• Bappenas Launches
SDGs Financing Hub
SDGs Financing
Hub
2020
3

4. Development of SDGs Financing Hub to Accelerate
Achievement of SDGs
Business
Public
Government
PPP (KPBU)
(VGF, PDF, AP)*
Government
budget
SDGs
Financing
Hub
• Philantrophy
• Crowdfunding
• Zakat, Infaq, Shodaqoh
• Kolekte, Perpuluhan,
Dana Dunia, etc
• Banks
• Capital and Financial Market
• FDI, Domestic Investment
• CSR, dll
SDGs Financing Hub
(coordinated by Bappenas)
Coordinate, facilitate, and synergize financing
innovations for the SDGs
1. Creating an Innovative funding environment
2. Building a strategic network and matchmaking
3. Develop models, instruments and technology
(showcasing)
4. Capacity building and knowledge sharing
Note:*) Viability Gap Fund, Project Development Facility, Availability Payment
4

5. Objective and Key Roles of SDGs Financing Hub
Indonesia needs financing of USD400 - 750 billion to meet the targets
set in the 2030 Sustainable Development Goals/SDGs, 40% of which
comes from the private sector
SDGs Financing Hub can optimally fill financing needs in the SDGs, by
prioritizing goals that require more funding or investment
The development of SDGs Financing Hub will support, facilitate, and
coordinate the achievement of the SDGs by filling the financing gap for
sustainable development.
1
2
Objective
Key Roles Description
SDGs Financing Hub must be able to carry out 3 main roles of SFH: Financing Coordination, Fund Management, and Project
Development
Financing
Coordination
• SFH assists the SDGs Implementation Team by activating the financing of SDGs projects in Indonesia to reduce the financing gap and create integrated efforts to
promote the SDGs;
• Key responsibilities include:
 Assist the SDGs Implementation Team in coordinating the financing of SDGs projects;
 Get a helicopter view of Indonesia's SDGs project financing needs
 Monitor and report on the progress of project implementation under SFH
 Knowledge Management related to innovative financing mechanisms and policies, best practices, and SDGs financing. This includes: (i) Internal knowledge
management; (ii) Socialization ; (ii) Konwledge Brokering; iv) Building Knowledge Capacity
Fund Management
• SFH acts to accommodate non-government investments, grants, etc. or blended finance (eg: PPP, which focuses on SDGs)
• Key responsibilities include:
 Fundraising to fill the financing gap in achieving the SDGs
 Provide funding for SDG projects that have been approved and meet the funding criteria
Project Development
• SFH acts as a project developer assisting in the development of viable and marketable SDG projects
• Key responsibilities include:
 Design and develop SDG projects in accordance with the purpose of providing capital and financiers;
 Prepare SDG projects developed by other parties to be ready for investment;
 Identify, classify, and match projects with appropriate financiers and financiers;
 Provide assistance to resolve issues related to eligibility to financial close;
 Drafting an agreement to fund/finance the project; and
 Develop innovative financing mechanisms to fund/finance projects.
SDGs
Financing
Hub
5

6. Indonesia Innovative Sources of Funding for SDGs
PPP (Public Private Partnership)
Financing by Public Sector ( GOI and
foreign bilateral and regional
cooperation) and private sector
Indonesia mostly for infrastuctures:
toll road, bridges.
PPP
Relatively new introduced in Indonesia
(early 2015), stakeholders coverage
wider than PPP Scheme. Public
finance/government budget, private
sector finance, (enterprises,
companies, stated-owned, local
government-owned), social fund,
philanthropy, etc. to support the 17
Sustainable Development Goals.
Blended Finance
6

7. Blended Finance as a Source of Funding for SDGs
Blended finance is the strategic use of development finance for the
mobilization of additional finance towards sustainable development in
developing countries.
• Blended finance is also a source of financing that can fill the investment
gap for the SDGs
• As a country that has entered the middle income category, Indonesia
cannot continue to depend on grants, so blended finance is an alternative
financing that needs to be encouraged.
• Blended finance is not a new source of financing, but an orchestration of
financing sources that need to be continuously developed
Blended Finance Principles
Anchor Blended Finance Use to a Development Rationale
Design Blended Finance to Increase The Mobilisation of
Commercial Finance
Tailor Blended Finance to Local Context
Focus on Effective Partnering for Blended Finance
Monitor Blended Finance for Transparency and Results
1
2
3
4
5
7

8. Blended Finance on Development and Revitalization of
Micro Hydro Power Plants (PLTMH) in Jambi (Example)
UNDP with Directorate General of New and Renewable
Energy and Energy Conservation (DJEBTKE)-MEMR and
the Jambi Provincial Government with support from
Bank Jambi and the National Amil Zakat Agency
(Baznas), in collaboration to implement Sustainable
Development Goals (SDGs) in Jambi Province,
particularly the use of New Renewable Energy which
can support poverty alleviation and community welfare
through increasing access to energy.
4 Location
180kW
Total Capacity
Support SDGs
803 Household
Electricity Access
4.448People
8

9. Blended Finance through Bilateral
Development Cooperation Project (Example)
MCC Grant Fund and Private Developer
9

10. Facilitating and Bridging Projects’ Access to Financiers
Renewable energy projects struggle to reach
financial
close due to certain technical and commercial
aspects that affect their bankability.
The Renewable Energy Projects (RE-Pro) II is part
of our continuing effort in overcoming various
constraints in renewable energy development. It
contains renewable projects from independent
power producers, some of which have signed
power purchase agreements with Indonesia state
utility, PT PLN (Persero).
The RE-Pro II in 2020 is an updated version of
RE-Pro I that we published during the 2018
Katowice Climate Change Conference. We
developed the RE-Pro II to become guidelines for
financial institutions, the private sector,
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11. THANK YOU