Indonesia MENTARI Low Carbon Energy Partnership: launch of energy efficiency component and signing of the Implementation Arrangement

28 Nov 2022

Today, on 28 November, the governments of the United Kingdom and Indonesia enhanced their collaboration with the launch of a new Energy Efficiency component of the MENTARI UK-Indonesia Low Carbon Energy Partnership, funded by the UK Partnering for Accelerated Climate Transitions (UK PACT) programme, with the aim of supporting Indonesia’s ambitions to accelerate their low carbon energy transition.

This agreement is the latest in a busy month that has signified the close and deepening partnership between Indonesia and the UK in this sector: on 15th November the ground-breaking Indonesia Just Energy Transition Partnership was announced at the G20 Leaders’ Summit in Bali. The UK has supported this through an agreement to provide a guarantee of up to $1 billion for World Bank lending, as well as through a newly signed agreement between the MENTARI programme and state-owned infrastructure project financing body, PT SMI, to launch a new joint investment scheme for renewable energy projects.

This new MENTARI Energy Efficiency partnership was confirmed today with the signing of an Implementation Agreement between the British Embassy Jakarta and the Ministry of Energy and Mineral Resources (MEMR) of the Republic of Indonesia. The signing marks the official launch of the MENTARI Energy Efficiency Strand (MENTARI EE), which aims to support Indonesia in achieving carbon reduction targets from the energy efficiency sub sector. The Energy Efficiency component expands the existing multi-year MENTARI partnership. The UK Government has committed £2.7 million from the UK Partnering for Accelerated Climate Transitions (UK PACT) programme to fund the new and extended MENTARI programme.

The MENTARI EE programme will support MEMR to achieve this target, through its work on energy efficiency interventions in the building sector as well as through the pilot of two new energy efficiency finance products and support for market-based instruments policy that will further incentivise energy efficiency implementation. This includes improving coordination amongst different energy actors and introducing policies and interventions that will make implementation of energy efficiency easier and more attractive to accelerate carbon emission reductions in the energy sector.

Under the existing MENTARI partnership between the British Embassy Jakarta and MEMR, the implementation of the MENTARI EE component will be led by the Directorate General of New Renewable Energy and Energy Conservation, MEMR. The MENTARI EE strand consists of three projects acting as one programme, with the aim of filling a current gap in policy making through developing policy recommendations, supporting the piloting of building-related energy efficiency projects, supporting the piloting of energy efficiency finance products, and improving sector collaboration. These projects will be led by leading organisations active in the energy efficiency sector, including the Institute for Natural Resources, Energy and Environmental Management (IREEM), Carbon Trust Singapore Pte Ltd, and Ecoxyztem Venture Builder.

Read more about the portfolio of projects funded under Indonesia-UK PACT:

  • The Integrated Energy Efficiency Programme for the Decarbonisation of Indonesia’s Building Sector (INTENS): Led by the Institute for Natural Resources, Energy and Environmental Management (IREEM), this project focuses on improving the energy efficiency of public buildings. It aims to support the Government of Indonesia to reduce GHG emissions in the building-management sector through the implementation of energy efficiency technologies. The project consists of three workstreams: strengthening energy efficiency expertise in Indonesia through the training and certification of energy efficiency professionals such as energy managers and auditors; developing, replicating and expanding energy efficiency pilot projects, with a focus on provincial government; and policy development, communications, and collaboration between policy makers and other stakeholders for long-term improvement of energy efficiency policy in Indonesia.
  • De-risking energy efficiency in Indonesia: pilot project for guarantees. Project lead: Carbon Trust Singapore Pte Ltd.: Led by Carbon Trust Singapore Pte Ltd, this project will engage the energy efficiency market in Indonesia, bringing together suppliers, end-users and financiers to develop and pilot a guarantee scheme for energy efficiency projects with the aim, by the end of the project, to have this ready to launch on the market. In parallel, the project will also conduct a study on Market Based Instruments (MBIs) for energy efficiency implementation, with the aim of creating further incentives for project owners, developers, and financiers to implement energy efficiency measures.
  • Creating an energy efficiency ecosystem through multi-stakeholder partnership approach in Indonesia: Led by Ecoxyztem Venture Builder, this project will establish a unique multi-year energy efficiency partnership among local, regional, and state stakeholders to accelerate energy efficiency. It aims to increase the capability of financial institutions to implement the Energy Saving Insurance (ESI) program in Indonesia and to catalyse development of future energy-saving projects in Indonesia by providing opportunities for capacity building, certification and networking.

Welcoming the launch of the Mentari Energy Efficiency component, British Ambassador to Indonesia and Timor Leste, Owen Jenkins CMG said:

“The UK Government is delighted to further strengthen our partnership with the Government of Indonesia, in support of Indonesia’s own efforts to accelerate the deployment of energy efficiency measures. These measures will go a long way to helping to achieve ambitious emissions reductions targets while reducing costs for consumers. This new work is a further milestone in the deep and expanding collaboration between our two countries in this sector, building on the well-established Mentari UK-Indonesia Low Carbon Energy Partnership, and it follows the UK’s participation in the Indonesia Just Energy Transition Partnership launched at the G20 Leaders’ Summit earlier this month.”

Witnessing the signing of Implementation Arrangement of the program, the Minister of Energy and Mineral Resources, Bapak Arifin Tasrif said:

“The Indonesian Government is happy to see stronger support from UK government through this energy efficiency programme. We thank Ambassador Owen Jenkins who has actively support initiative which will be rolled out nationwide. Support for the improvement in energy efficiency is critical as we were reminded by the recent energy crisis that impacted countries globally, not only Indonesia.”

Read more about the portfolio of projects funded under Indonesia-UK PACT

Notes to editors

Energy efficiency is an essential part of making our use of energy more cost effective and sustainable. It is fundamental for global efforts to tackle climate change through a reduction in emissions. Energy efficiency is the effort, including through policy, behaviour, and technology, to decrease energy consumption (for example how much electricity we use), without reducing the benefits we get from this energy, such as lighting, air conditioning and water heating. For example, to provide sufficient light for a small room, a traditional lightbulb would need 40 watts of electricity, while a modern LED light only needs 5 watts; providing the same benefit but using 88% less power. This means if we change our traditional lightbulbs to LED, we have implemented an energy efficiency measure. Replicating initiatives like this, for different appliances and on a grand scale, can dramatically reduce our need to generate power, saving money and reducing emissions. The MENTARI EE strand has been developed on the basis that energy efficiency is the fastest and cheapest climate mitigation action in the energy sector (IEA, 2021). The Government of Indonesia has set a target for Indonesia’s energy industry to become 17% more efficient in all sectors by 2025 and predicts that this could result in a 30% reduction of total greenhouse gas emissions from the energy sector by 2030.

The lead organisations and partners responsible for implementing the Indonesia Energy Efficiency projects are:

   Lead organisation   Consortia partners
Institute for Natural Resources, Energy and Environmental Management (IREEM) Lembaga Sertifikasi Profesi (LSP);
Himpunan Ahli Konservasi Energi (HAKE);
Indonesian Institute for Energy Economics (IIEE)
Carbon Trust Singapore Pte Ltd Climate Policy Initiative (CPI)
Ecoxyztem Venture Builder Enertec Mitra Solusi