Indonesia sees steady rise in renewable energy capacity

Indonesia's renewable energy capacity is rising year-on-year, according to Pandu Patria Sjahrir, chief investment officer (CIO) at the Investment Management Agency Daya Anagata Nusantara (BPI Danantara) of Indonesia.

Speaking at the FT Energy Transition Summit Asia in Jakarta on June 25, Sjahrir noted that this growth has outpaced the country’s GDP and said the renewable energy sector is likely to become the fastest-growing component of the national energy sector.

He described Indonesia as an appealing destination for investment in energy transition, citing its position as Southeast Asia’s largest energy consumer and the region’s fourth most populous country. However, he pointed out that the majority of the country's existing power plants still rely on fossil fuels.

Sjahrir also acknowledged that Indonesia has so far attracted only 10% of global energy transition investment flowing into ASEAN, and 29% of intra-ASEAN capital in the sector.

This, he said, demonstrates significant untapped potential of energy transition investment in Indonesia, particularly through partnerships with local enterprises as investors, as well as by addressing operational and licensing challenges.