The mystery of Biden’s IDR 300 trillion for IR, debt or grants?

Nusa Dua, CNBC Indonesia – The G20 summit in Bali which has been taking place since yesterday, Tuesday (15/11/2022), was officially closed today, Wednesday (16/11/2022) by President Joko Widodo (Jokowi).

The two-day G20 Summit also had a positive impact on Indonesia. One of them is the financing commitment of up to US$20 billion, or approximately IDR 311 trillion (assuming an exchange rate of IDR 15,564 per US dollar) from developed G7 member countries. , including the United States, for Indonesia.

The member countries of the G7 are the United States, Great Britain, Canada, France, Germany, Italy and Japan.

This was stated by President Joko Widodo (Jokowi) during the closing press conference of the G20 summit in Bali on Wednesday (16/11/2022).

President Jokowi said the $20 billion funding commitment was for the country’s energy transition program. He said it was one of the outcomes of a number of other high points at the G20 summit in Bali.

“There were several outcomes, the formation of a pandemic fund that raised $1.5 billion. Then the formation and operationalization of resilience and sustainability under the IMF $81.6 billion for helping countries facing crises. Next, the Energy Transition Facility in Indonesia secured the commitment of the Just Energy Transition Partnership (JETP) for the $20 billion program,” he said during of a press conference after the closing of the G20 summit in Bali, Wednesday 16/11/2022.

“Concrete results, although there are actually a lot of other results,” he said.

So, does the funding commitment from the US, Britain and other G7 members take the form of low-interest debt or grants?

Finance Minister Sri Mulyani finally opened her voice on this. He said the details of this funding commitment would be further discussed with a number of related parties as it was a combination of multilateral, bilateral and also philanthropic development banks, as well as grants (to agree).

“We will see on the details side because there are various combinations coming from multilateral, bilateral development banks, and also from a philanthropic point of view. to agree (subsidies), this is what we will see. We’ll see,” he said.

However, he pointed out that the $20 billion funding will definitely come from international parties, not Indonesian institutions.

“It will be international,” he said.

So what type of program is this funding for? Is it only to accelerate the withdrawal of the coal-fired steam plant (PLTU) or is it also for other programs?

Sri Mulyani said that this program would later aim at accelerating the withdrawal of coal-fired power plants. However, it will be seen later whether there are PLN PLTU assets that are ready for retirement or PLTUs from private power developers.Independent Power Producers/ PPI).

“So it will be seen based on what was submitted yesterday, from PLN there are those who are ready to come from PLN’s own assets, from IPP the involvement has been announced from INA, so per project will be seen,” he explained.

As is known, the President of the United States Joe Biden at the G20 summit yesterday, Tuesday (15/11/2022), said that the G7 commitment of US$20 billion for Indonesia was intended to support the development of New Renewable Energies (EBT) and support the acceleration of the energy transition through the shutdown of the Coal Steam Plant (PLTU).

“Together with Indonesia and Japan, we created the Just Energy Transition Partnership (JETP) to achieve Net Zero Emissions (NZE). Together, we mobilized US$20 billion to develop EBT and supporting the energy transition away from coal $20 billion energy transition institution whose impact is being felt around the world,” he said at the G20 summit in Bali on Tuesday (11/15/ 2022).

Biden said it could also be used to promote projects based on renewable energy, such as supporting the development of electric vehicles and technologies.

“It can also create jobs and help reduce the impact of global climate change,” he said.

On this occasion, Biden also revealed that the G7 had officially launched a global financing for infrastructure with a fundraising of up to 600 billion dollars for the next five years.

“It’s about quality development, sustainable infrastructure and low-carbon investments for middle-income countries (developing countries),” he said.

[Gambas:Video CNBC]

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