USAID ICED II begins work on for financing handbook of solar PV projects for the Financial Services Authority (OJK)

14 April 2020

The Indonesian Financial Services Authority (OJK) requested USAID Indonesia Clean Energy Development II (ICED II) project to create financing handbook for solar PV projects to be used by banks and non-bank financial institutions. As ICED II project will end in September 2020, the handbook material will be handed to OJK. OJK will then handle consultation meetings and follow-up activities, including the approval process from the Commissioner Board of OJK, to finalize handbook publication.

USAID ICED II will present financing mechanisms in the solar PV handbook, as well as alternative business models allowed under current laws and regulations. In preparing the handbook, USAID ICED II has engaged UMBRA Strategic Legal Consulting and LPEM FEB UI, the University of Indonesia’s School of Economics and Business think tank.

During the online kick-off meeting held by USAID ICED II, it was agreed that UMBRA will provide analysis on existing/available financing structures for solar PV projects in Indonesia, both for on-grid and off-grid power plants developed by private sector. The analysis will cover financing structure in capital markets such as bond, initial public offering (IPO), and mutual funds.

LPEM FEB UI, meanwhile, will conduct in-depth structured interviews with banks and solar PV project developers. UMBRA will share slides of graphics on available financing structure, while LPEM FEB UI finalizes the questionnaire for interviews.

The next virtual meeting is scheduled in two weeks. In between, LPEM FEB UI and UMBRA will have a virtual meeting to discuss progress of both parties regarding solar PV project.