Blended Finance for Renewable Energy

The dialogue highlighted that while Indonesia’s renewable energy ambitions continue to grow, financing remains a key bottleneck. Blended finance has emerged as a critical instrument to bridge this gap by combining public, private, and concessional capital to reduce risks and improve project bankability.

Key Insights

Blended finance as a catalyst for investment

Participants emphasized the role of blended finance in de-risking projects, lowering the cost of capital, and crowding in private investment. Instruments such as concessional loans, guarantees, and technical assistance were identified as key enablers to support project development and financing.

Addressing structural challenges in renewable energy financing

Discussions underscored persistent challenges, including limited project pipelines, high transaction costs, regulatory constraints, and perceived risks in renewable energy projects. These barriers continue to limit the participation of both domestic and international investors.

Importance of project preparation and pipeline development

A strong pipeline of bankable projects was identified as a critical prerequisite for scaling blended finance. Stakeholders highlighted the need for improved project preparation, early-stage support, and better coordination across institutions to ensure investment readiness.

Looking Ahead

The SBH Multi-Stakeholder Dialogue reaffirmed that blended finance could play a pivotal role in unlocking renewable energy investments in Indonesia. Moving forward, continued collaboration, policy alignment, and targeted financial instruments will be essential to scale solutions and accelerate the transition to a low-carbon economy.