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Energy Energy Indones Indones ia ia SAV SAV E E
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SectorReduction Target
(Gton CO2e)
26% 41%
Forestry and LULUCF
0,672 1,039
Energy and Transportation
0,036 0,056
Agriculture 0,008 0,011
Industry 0,001 0,005
Waste 0,048 0,078
Others
Total 0,767 1,189
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Background
PP No 70/2009 of ENERGY CONSERVATION “the central government and/or local government can provide facilities and incentives to energy users and producers of energy-efficient appliances that implement energy conservation program “
PP No 70/2009 of ENERGY CONSERVATION “the central government and/or local government can provide facilities and incentives to energy users and producers of energy-efficient appliances that implement energy conservation program “
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Purpose & Methodology
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ENCON Fund
Revolving Fund
Revolving Fund
11 Banks11 Banks
EE/RE Developers
EE/RE Developers
DEDEDEDE
additionalother sources
e.g. ESCO Fund
additionalother sources
e.g. ESCO Fund
Thailand has successfully implemented energy efficiency revolving fund scheme
This funding get revenue from the excess of levies on fuel at 0.04 THB (USD 0.001) per liter THB 2 billion (USD 50 million per year)
In order to distribute the funds, the Government of Thailand is involving 11 commercial banks, with maximum loan is restricted up to THB 50 million (USD 1.25 million)
the government charging interest rate to banks 0.5%, The bank then lends it to the projects with interest not more than 4% per year.
The loans can be utilized to financed projects i.e. (Vorasayan, 2012) :
a. Purchasing and installing the energy efficient equipment projects;
b. engineering design and supervision costs as well as cost savings guarantee for the ESCo;
c. installation cost and operational cost of energy efficient appliances;
d. Transportation costs, demolition costs, etc.
Lesson Learn... Thailand Energy Efficiency Revolving Fund Scheme
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Indonesia EERFIndonesia EERF - - GoalsGoals
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Indonesia Investment
Agency(PIP)
Indonesia Investment
Agency(PIP)
Energy Efficiency ProjectsEnergy Efficiency Projects
Technical Committee
Government (MOF)
Government (MOF)
BanksBanks
Fund & Monev
(2% per year)
Loan
(7-9% per year)
Coordination
LoanM
onitorin
g & ev
aluation M
onitoring & evaluation
Analysis - Indonesia EERF Scheme
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EERF Application Process Disbursement
www.themegallery.com
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Formulating Indonesia EERF
1. The funds (EERF) will be placed through the Indonesia Investment Agency (PIP) before it distribute to the designated Bank with interest rate around 2% per year;
2. Further, Banks will lend the fund to the energy efficiency projects at a maximum interest rate of 7-9% per year, far below the corporations Prime Lending Rate (SBDK);
3. The PIP will act as Fund Channeling, and the Bank will be the Executing Agency;
4. Loans are given from the range between IDR 1 billion to 20 billion for financing small and medium-scale investments;
5. The loan period can be provided with a range of 5 to 6 years including 1 year grace period (payback period up to 4-5 years)
6. Monitoring and evaluation will be conducted by a technical commission from related line ministries
1. The funds (EERF) will be placed through the Indonesia Investment Agency (PIP) before it distribute to the designated Bank with interest rate around 2% per year;
2. Further, Banks will lend the fund to the energy efficiency projects at a maximum interest rate of 7-9% per year, far below the corporations Prime Lending Rate (SBDK);
3. The PIP will act as Fund Channeling, and the Bank will be the Executing Agency;
4. Loans are given from the range between IDR 1 billion to 20 billion for financing small and medium-scale investments;
5. The loan period can be provided with a range of 5 to 6 years including 1 year grace period (payback period up to 4-5 years)
6. Monitoring and evaluation will be conducted by a technical commission from related line ministries
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Opportunities and ChallengesOpportunities and ChallengesThe implementation of revolving fund scheme for energy efficiency in Indonesia is very potential to be executed, due to various forms of legislation and fund management mechanism has been established. However, there are several steps that need to be considered, namely:Fund Preparations.
The source of funds shall be determined in the initial stage. If the government set the source of fund from the state budget, it is necessary to set the legal basis under a constitution in order to accommodate the allocation budget.Institutional Arrangements for Energy Efficiency Revolving Fund scheme.
As defined in the chapter analysis, the revolving fund program can be implemented and managed by PIP. Therefore, it is necessary to establish a legal basis under constitution in order to give PIP the legitimacy to manage the energy efficiency revolving fund.In-depth discussion with banks / financial institutions.
Discussions with the banks / financial institutions are strongly needed, in order to get feedback on the revolving fund initiative policy. It is very urgent, since at the end, the banking sector is the one who run the policy. Inputs from the banks are strongly needed to capture ideas of the best-suit revolving fund scheme.
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COST AND BENEFIT ANALYSIS
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COST AND BENEFIT ANALYSIS
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Interest RateInterest Rate
Lending rate is the total of Suku Bunga Dasar Kredit (SBDK) plus risk premium
SBDK comprises of: Total of Harga Pokok Dana untuk Kredit (HPDK) i.e.
deposits, savings, etc, Overhead cost (operational cost and taxes) Profit margin
Ilustration: HPDK = 5-6% Overhead = 2-3% Margin = 2% Risk Premium = 1,5-2%Total Lending Rate = 10,5-13%
7,5% - 9%7,5% - 9%
