The Impact of Green Sukuk on Energy Transition in Indonesia (2018-2020)
DOI:
https://doi.org/10.46851/167Abstrak
This paper analyzes the critical nexus between green finance and energy transition through the case study of Indonesia’s green sukuk. As an innovative financial instrument issued by the Indonesian government in 2018, green sukuk has successfully raised funds in the capital market to finance green projects in various sectors. However, this achievement is considered unable to significantly drive the energy transition toward electrification between 2018 and 2020. This study aims to answer the question of why green sukuk has a less significant impact on renewable energy development for electrification. Through literature study and semi-structured interviews, it argues two underlying reasons for explaining the dissatisfactory result of green sukuk. First, it suggests technical problems such as the lack of available renewable energy projects, inadequate coordination between key ministries, and force majeure due to COVID-19 have resulted in the relatively small renewable energy projects in green sukuk. Secondly, Indonesia’s hesitancy to eliminate fossil fuels in its energy and electricity governance has arguably created a systemic barrier for renewable energy projects to be included more significantly in Climate Budget Tagging and green sukuk. This study contributes to situating green finance in the social-political context besides examining green finance not only from the capital element but also from the deliverable aspect to the targeted sectors. It concludes the research by suggesting that the Indonesian government not only focuses on securing funding but also regulates existing financial instruments to meet priority targets by improving coordination between line ministries and starting divesting and tightening regulations for fossil fuels.
Referensi
Abnett, K., & Piper, E. (2021). China, India, other big coal users missing from COP26 phase-out deal. Reuters. https://www.reuters.com/business/cop/cop26-coal-deals-take-aim-dirtiest-fossil-fuel-2021-11-03/
Anugrahaeni, P. (2017). Analysis of Indonesian Sovereign Green Bond and Green Sukuk Initiatives. Kajian Ekonomi dan Keuangan, vol. 1, no. 1. https://doi.org/10.31685/kek.v1i1.266
Azhgaliyeva, D. (2021). Green Islamic Bonds. Asian Development Outlook 2021: Financing a Green Inclusive Recovery. https://www.adb.org/sites/default/files/institutional-document/691951/ado2021bn-green-islamic-bonds.pdf
Bridle, R., Gass, P., Halimajaya, A., Lontoh, L., McCulloch, N., Petrofsky, E., Sanchez, L. (2018). Missing the 23 percent Target: Roadblocks to the development of renewable energy in Indonesia. International Institute for Sustainable Development. https://www.iisd.org/publications/report/missing-23-cent-target-roadblocks-development-renewable-energy-indonesia
Deha, D. (2018). Insight: Political Elites on The Coal Business Corruption. https://theinsiderstories.com/insight-political-elites-on-the-coal-business-corruption/
Dutu, R. (2016). Challenges and policies in Indonesia’s energy sector. Energy Policy, 98, 513-519. https://doi.org/10.1016/j.enpol.2016.09.009
Fitrah, R., & Soemitra, A. (2022). Green Sukuk for Sustainable Development Goals in Indonesia: A Literature Study. Jurnal Ilmiah Ekonomi Islam, vol. 8, no. 1. http://dx.doi.org/10.29040/jiei.v8i1.4591
Glomsrod, S., & Wei, T. (2018). Business as unusual: The implications of fossil divestment and green bonds for financial flows, economic growth and energy market. Energy for Sustainable Development. https://doi.org/10.1016/j.esd.2018.02.005
Gunningham, N. (2013). Managing the energy trilemma: The case of Indonesia. Energy Policy, vol. 54. https://doi.org/10.1016/j.enpol.2012.11.018
IESR. (2020). Permen ESDM 4/2020 Harapan Baru bagi Perbaikan Iklim Investasi Energi Terbarukan di Indonesia. https://iesr.or.id/infografis/permen-esdm-no-4-tahun-2020-harapan-et-bangkit-dari-mati-suri-2
Jones, R., Baker, T., Huet, K., Murphy, L., Lewis, N. (2020). Treating ecological deficit with debt: The practical and political concerns with green bonds. Geoforum, 114, 49-58. https://doi.org/10.1016/j.geoforum.2020.05.014
Liebman, A., Reynolds, A., Robertson, D., Nolan, S., Argyriou, M., Sargent, B. (2019). Green Finance in Indonesia. In: Sachs, J., Woo , W., Yoshino, N., Taghizadeh-Hesary, F. (eds) Handbook of Green Finance. Sustainable Development. Springer, Singapore. https://doi.org/10.1007/978-981-10-8710-3_5-1
Mafira, T. (2021). Blog: Indonesia wants a carbon tax, but with subsidies?. Climate Policy Initiative. https://www.climatepolicyinitiative.org/id/blog-indonesia-wants-a-carbon-tax-but-with-subsidies/
Maulidia, M., Dargusch, P., Ashworth, P., Ardiansyah, F. (2019). Rethinking renewable energy targets and electricity sector reform in Indonesia: A private sector perspective. Renewable and Sustainable Energy Reviews, vol. 101. https://doi.org/10.1016/j.rser.2018.11.005
McLaughlin, T. (2018). U.S. clean coal program fails to deliver on promised smog cuts. Reuters. https://www.reuters.com/investigates/special-report/usa-coal-pollution/
Meilanova, D. (2018). Pengembang EBT Nilai Permen 50/2017 Tak Menarik, Jonan: Masih Banyak yang Lain. Bisnis. https://ekonomi.bisnis.com/read/20180223/44/742237/pengembang-ebt-nilai-permen-502017-tak-menarik-jonan-masih-banyak-yang-lain
Ministry of Energy and Mineral Sources. (2016). Keputusan Menteri Energi dan Sumber Daya Mineral Republik Indonesia Nomor 5899 K/20/MEM/2016 tentang Pengesahan Rencana Usaha Penyediaan Tenaga Listrik PT Perusahaan Listrik Negara (Persero) Tahun 2016 s.d. 2025.
Ministry of Energy and Mineral Sources. (2017). Peraturan Presiden Republik Indonesia Nomor 22 Tahun 2017 tentang Rencana Umum Energi Nasional.
Ministry of Finance. (n.d.). Indonesia Country Programme for the Green Climate Fund. https://fiskal.kemenkeu.go.id/nda_gcf/en/publications/indonesia-country-programme-for-the-green-climate-fund
Ministry of Finance. (2018). Indonesia’s green bond and sukuk initiative. https://climatepromise.undp.org/research-and-reports/indonesias-green-bond-sukuk-initiative
Ministry of Finance. (2019). Public Finance for Climate Change in Indonesia 2016-2018. Fiscal Policy Agency. ISBN: 978-623-92103-4-2
Ministry of Finance. (2021). Green Sukuk Issuance: Allocation and Impact Report 2021. https://djppr.kemenkeu.go.id/uploads/files/dmodata/in/6Publikasi/Offering%20Circular/Green%20Sukuk%20Allocation%20and%20Impact%20Report_2021%20FINAL.pdf
Ministry of Finance. (2022). Press Release: Republic of Indonesia priced a US$ 3.25 billion Global Sukuk, the largest Global Sukuk transaction ever issued by the Republic. https://www.bi.go.id/en/iru/highlight-news/Documents/Press%20Released%20Global%20Sukuk%20Transaction%2024%20May%202022.pdf
Mujizat, D. (2021). The Sovereign Green Sukuk: An Analysis of Its Process and Barriers to Funding Renewable Energy Projects in Indonesia. Master thesis in Sustainable Development at Uppsala University, No.2021/33,65pp, 30 ECTS/hp
Mulyana, R. (2019). Target Investasi Energi Terbarukan Menciut Jadi US$ 1, 79 Miliar. Kontan. https://insight.kontan.co.id/news/target-investasi-energi-terbarukan-menciut-jadi-us-179-miliar
Nettleton, G., & Kutwaroo, K. (2010). Coal and climate change. Down to Earth. https://www.downtoearth-indonesia.org/story/coal-and-climate-change
Newell, P. and Paterson, M. (1998). Climate for Business: Global Warming, the State and Capital. Review of International Political Economy, 5 (4), 679–704.
Newell, P. (2011). The Governance of Energy Finance: The Public, the Private, and the Hybrid. Global Policy, 2 (s1), 94-105. http://dx.doi.org/10.1111/j.1758-5899.2011.00104.x
Oboirien, B., North, B., Obayopo, S., Odusote, J., Sadiku, E. (2018). Analysis on clean coal technology in Nigeria for energy generation. Energy Strategy Reviews, 20, 64-70. https://doi.org/10.1016/j.esr.2018.01.002
OECD. (2019). Indonesia’s Effort to Phase Out and Rationalise Its Fossil Fuel Subsidies. https://www.oecd.org/fossil-fuels/publication/Indonesia%20G20%20Self-Report%20IFFS.pdf
Ordonez, J., Jakob, M., Steckel, J., Funfgeld, A. (2021). Coal, power, and coal-power politics in Indonesia. Environmental Science & Policy, 123, 44-57. https://doi.org/10.1016/j.envsci.2021.05.007
Ordonez, J., Fritz, M., & Eckstein, J. (2022). Coal vs. renewables: Least-cost optimization of the Indonesian power sector. Energy for Sustainable Development, 68, 350-363. https://doi.org/10.1016/j.esd.2022.04.017
PLN. (2021). Rencana Usaha Penyediaan Tenaga Listrik (RUPTL) PT PLN (Persero) 2021-2030. https://web.pln.co.id/statics/uploads/2021/10/ruptl-2021-2030.pdf
Prisandy, R., & Widyaningrum, W. (2022). Green bond in Indonesia: The challenges and opportunities. In A. P. Sunjaya, Y. B. Wang, R. Sagita, & D. Sugiharti (Eds.), Indonesia post-pandemic outlook: Rethinking health and economics post-COVID-19 (259–278). BRIN Publishing. 10.55981/ brin.537.c529 ISBN: 978-623-7425-91-5 E-ISBN: 978-623-7425-92-2
Rahman, A., Richards, R., Dargusch, P., Wadley, D. (2023). Pathways to reduce Indonesia’s dependence on oil and achieve longer-term decarbonization. Renewable Energy, 202, 1305-1323. https://doi.org/10.1016/j.renene.2022.11.051
Republic of Indonesia. (n.d.). Green Bond and Green Sukuk Framework.
Sachs, J., & Schmidt-Traub, G., (2015). Financing Sustainable Development: Implementing the SDGs through Effective Investment Strategies and Partnerships. https://www.semanticscholar.org/paper/Financing-Sustainable-Development%3A-Implementing-the-Schmidt-Traub-Sachs/ca9af2d591bdc06d855abbdfa874a39964f8bdd2
Simanjuntak, U. (2023). Indonesia Needs to Overhaul Strategy to Pursue 23% Renewable Energy Mix in 2025. Institute for Essential Services Reform. https://iesr.or.id/en/indonesia-needs-to-overhaul-strategy-to-pursue-23-renewable-energy-mix-in-2025
Sriwijaya, A., Devi, A. (2022). Indonesia’s Response to COVID-19: The Prospect of Green Recovery Amidst Coal Energy Dependence. SentriS Jurnal Mahasiswa Hubungan Internasional. https://doi.org/10.26593/sentris.v3i1.5090.1-15
Suroso, D., Setiawan, B., Pradono, P., Iskandar, Z., Hastari, M. (2022). Revisiting the role of international climate finance (ICF) towards achieving the nationally determined contribution (NDC) target: A case study of the Indonesian energy sector. Environmental Science & Policy, vol. 131. https://doi.org/10.1016/j.envsci.2022.01.022.
Tempo. (2022). Govt Claims Indonesia Has Lowest Electricity Tarrif in ASEAN. https://en.tempo.co/read/1579137/govt-claims-indonesia-has-lowest-electricity-tariff-in-asean#:~:text=The%20data%20from%20state%20electricity,per%20kWh%20is%20indeed%20lower.
UNFCCC. (2018). Indonesia Second Biennial Update Report. https://unfccc.int/documents/192165
Utami, A. (2023). Obat Sementara Bernama Pendanaan Hijau. Tempo. https://majalah.tempo.co/read/laporan-khusus/167459/mengapa-pembiayaan-hijau-seperti-obat-sementara
Volz, U. (2018). Fostering Green Finance for Sustainable Development in Asia. ADBI Working Paper 814. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3198680#
Wang, S. (2020). Near-Zero Air Pollutant Emission Technologies and Applications for Clean Coal-Fired Power. Engineering, 6, 1408-1422. https://doi.org/10.1016/j.eng.2019.10.018
Winanti, P., & Diprose, R. (2020). Reordering the extractive political settlement: Resource nationalism, domestic ownership and transnational bargains in Indonesia. The Extractive Industries and Society, 7, 1534-1546. https://doi.org/10.1016/j.exis.2020.08.015
Winanti, P., & Mas’udi, W. (2022). Bringing state capacity into the debate: a key for energy transition in emerging economy. Journal of World Energy Law and Business, 15, 333–345. https://doi.org/10.1093/jwelb/jwac018
Xie, Ke-Chang. (2021). Breakthrough and innovative clean and efficient coal conversion technology from a chemical engineering perspective. Chemical Engineering Science: X, 10. https://doi.org/10.1016/j.cesx.2021.100092
Diterbitkan
Terbitan
Bagian
Lisensi
Hak Cipta (c) 2025 Journal of Business and Political Economy : Biannual Review of The Indonesian Economy
Artikel ini berlisensi Creative Commons Attribution 4.0 International License.
This work is licensed under a Creative Commons Attribution 4.0 International License.
