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Anies plans endowment fund for renewables
Former Jakarta governor Anies is one of three candidates hoping to take over from President Joko "Jokowi" Widodo, whose second and final term is due to end next year.
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Presumptive presidential nominee from the Coalition for Change electoral alliance Anies Baswedan (left) and his running mate National Awakening Party (PKB) chair Muhaimin Iskandar wave to the press at the former's residence in South Jakarta on Oct. 19, 2023. The candidate pair registers their bid with the General Elections Commission (KPU) on the first day of presidential candidate registration period, slated for Oct. 19 to 25. (Antara/Indrianto Eko Suwarso)
Presidential candidate Anies Baswedan will set up an endowment fund using revenue from a planned carbon tax to finance the development of renewable energy if he wins the Feb. 14 elections, his lead economist told Reuters.
Former Jakarta governor Anies is one of three candidates hoping to take over from President Joko "Jokowi" Widodo, whose second and final term is due to end next year.
Anies will levy a carbon tax on greenhouse gas emitted by polluting industries and place the revenue on what he will call the Resource Endowment Fund, said Wijayanto Samirin from Anies' team.
With a Rp 10 trillion ($645.6 million) seed capital from the state budget, the fund is expected to finance geothermal exploration and renewables research, he said.
"The endowment fund is to guarantee that the money will really be allocated on efforts to cut carbon emissions. It will not go into the government's pocket and be used for other purposes," Wijayanto said.
Jokowi passed a law in 2021 to serve as a legal basis for his government to impose a carbon tax, but the levy has been delayed indefinitely to protect economic growth.
Indonesia has around 24 gigawatts of geothermal potential, the world's second-largest, but has only utilised around 10 percent of this, according to state energy company Pertamina.
Geothermal exploration is expensive and risky, deterring investment, said Wijayanto. If the government could compile reliable data on proven reserves, it would reduce investment risks.
Anies aims to increase the proportion of renewables in Indonesia's energy mix to 22 percent - 25 percent by 2029, from around 12 percent now.
Jokowi had targeted 23 percent by 2025, but he recently conceded that would be missed.
Over half of Indonesia's electricity is currently powered by coal.
Recent opinion surveys have put Anies last in the presidential race, behind Defence Minister Prabowo Subianto and former Central Java governor Ganjar Pranowo.
Prabowo and Ganjar have both considered pushing to end the state power utility's monopoly as part of efforts to speed up the transition to greener energy, their teams told Reuters.
