Danantara and the Gulf could finally turn Indonesia’s renewable energy ambition into reality |
Indonesia has no shortage of renewable energy ambition. What it lacks is capital, execution and, above all, trust.
For years, successive governments have promised a green transition. The targets have become increasingly ambitious, culminating in President Prabowo Subianto’s pledge to accelerate Indonesia’s energy transition and build up to 75 gigawatts of renewable energy capacity in the coming decades, a plan that could require at least US$235 billion in investment.
Yet the reality remains sobering.
Indonesia’s renewable energy mix remains far below the national target. The government originally aimed for renewable energy to contribute 23 percent of the national energy mix, but the figure remains stuck at around 16 percent. Even that number includes geothermal energy, which, while classified as renewable, continues to raise ecological concerns due to its impacts on forests, biodiversity and local communities.
Meanwhile, Indonesia’s electricity planning still struggles to break free from its dependence on fossil fuels. Coal-fired power plants remain deeply embedded within the country’s energy system, and discussions about early retirement of coal plants often end with the same explanation: there is not enough financing.
But what if financing is precisely where the solution lies?
This is where Danantara, Indonesia’s new sovereign wealth fund, could become one of the most important institutions in the country’s energy transition.
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