USAID develops a reference in power purchase agreement evaluation for financial service institutions

USAID Indonesia Clean Energy Development II (ICED II) has been assisting financial service institutions (FSI), banks and non-banks, through Financial Services Authority (Otoritas Jasa Keuangan – OJK), or direct assistance to individual institution. The assistance covered trainings, project evaluation and production of modules related to renewable energy technology and financing, with the goal is to improve FSI’s capacity to realize renewable energy financing in Indonesia. Power purchase agreement between independent power producer and State Electricity Company (PLN) plays an important role for FSI, especially during projects’ due diligence phase in determining the projects’ bankability. To provide a reference for FSI, USAID ICED II is developing a guideline to evaluating power purchase agreement for financial service institution.

As part of the book development process, on May 23, 2019, USAID ICED II held a consultation meeting with the financial service institutions, OJK and the National Development Planning Agency (Bappenas) to gather lenders’ insights and feedbacks on essential key issues in evaluating power purchase agreement for renewable energy projects. USAID ICED II is set to finalize the guidebook in three months for further adoption by OJK as the regulator.