Driving Sustainable Development Through Green Financing: A Strategic Analysis of Indonesia’s Renewable Energy Sector

DOI

10.2991/978-2-38476-406-8_9How to use a DOI?

Keywords

renewable energy; green financing; impact investment matchmaking model; PESTLE analysis

Abstract

Energy is a primary capital for a nation in achieving its vision and mission. Indonesia’s energy needs continue to increase along with its growing population. The government is continuously striving to meet this demand, but not without challenges. Environmentally-conscious development directions require the government to transition to more eco-friendly energy sources, known as Renewable Energy (RE), by launching the Just Energy Transition Partnership (JETP) with international funding at the G20 Summit. The strong interest from countries in the form of foreign investment indicates that Indonesia has high potential in the renewable power generation sector as a replacement for coal. Nonetheless, Indonesia’s commitment to energy transition also faces several challenges. In this study, Greenwise Consulting aims to comprehensively analyse the drivers and barriers in the renewable energy sector in efforts to access green financing. The information gathered from a sample of respondents, including private companies, investors, associations, and government entities, was further analysed using the Impact Investment Matchmaking Model framework combined with PESTLE analysis as this framework is designed to connect investors who are interested in making impact investments with projects or companies that are seeking funding for initiatives that deliver both financial returns and positive social or environmental impacts. It can be concluded that the renewable energy sector has clear drivers such as a defined business model, momentum, and abundant renewable energy supply. However, barriers like the non-functional carbon trading market, long break-even points, and the low ability of the public to pay high prices need to be addressed. Therefore, several policies related to enabling private involvement and financing need to be adjusted to increase private sector involvement and create a thriving market, ensuring that Indonesia’s commitment to achieving energy transition can be realised.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Lenny Hidayat
AU  - Michael Timothy Tasliman
AU  - Cholisa Amalia
PY  - 2025
DA  - 2025/05/22
TI  - Driving Sustainable Development Through Green Financing: A Strategic Analysis of Indonesia’s Renewable Energy Sector
BT  - Proceedings of the International Conference on Multidisciplinary Studies (ICoMSi 2024)
PB  - Atlantis Press
SP  - 100
EP  - 111
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-406-8_9
DO  - 10.2991/978-2-38476-406-8_9
ID  - Hidayat2025
ER  -