Jakarta. A UK-backed bilateral program called Mentari has helped Indonesia secure potential green investments worth approximately $1 billion, according to a British diplomat.

The British Embassy in Jakarta has been working together with the Indonesian government on a multi-year program meant to expedite low-carbon energy adoption in the Southeast Asian economy. Since its launch in 2020, Mentari has assisted the coal-reliant Indonesia in making its renewable energy sector more attractive to investors both from home and abroad, British Deputy Ambassador Matthew Downing said. 

“We are on course to [unlocking investments] worth $1 billion. There is other work going on in terms of encouraging even more investments in Indonesia’s renewable sector,” Downing told reporters in Jakarta on Thursday.

“These investments [that I'm talking about] are not only from the UK. There are domestic and international investments. Mentari is more about building the platform and making investors more confident in what they are going to be getting from their investment,” Downing said.

The Mentari program includes the so-called Viability Gap Fund (VGF), a financing mechanism meant to make small to medium-scale renewable energy projects across Indonesia more investable. To this end, the fund covers parts of the costs to lower the financial risks for developers and lenders. The British Embassy partnered with the government-owned financing agency Sarana Multi Infrastruktur (SMI) on this side of the project. 

The UK-funded grant worth Rp 21 billion (almost $1.3 million) has helped unlock financing for three hydropower plants developed by local company Brantas Energi. These plants -- totaling 7.1 megawatts in combined capacity -- lie in Lombok, Bali, and West Sumatra. London also claimed that the grant not only had improved the projects’ financial viability, but also leveraged around Rp 210 billion in total investments.

Mentari has just wrapped up its first phase, and both countries are already planning to go for another round. However, Downing said that Mentari 2 was still under development, although he hinted that London was open to focusing on remote areas that haven't had adequate access to electricity in the second phase. Eniya Listiani Dewi, a senior official at the Energy Ministry, said that Indonesia wanted to push for greater gender inclusivity as well as the appointment of “local champions in every village” should they really launch Mentari 2.

Indonesia aims to reach net-zero emissions by 2060 or sooner.