IsDB Group Signs MoU with Indonesia’s Persero to Support Energy Transition and Islamic Finance Capacity Enhancement

Bali, Indonesia, 14 November 2022 – Islamic Development Bank (IsDB) President and Group Chairman, H.E. Dr. Muhammad Al Jasser, and President Director for PT Sarana Multi Infrastruktur (Persero) (“PT SMI”) H.E. Edwin Syahruzad, have signed a Memorandum of Understanding (MoU).

The document that was signed on 14th November 2022, in Bali, Indonesia, aims to promote a partnership between IsDB Group and PT SMI regarding the potential provision of a line of financing and co-financing for Energy Transition, Renewable Energy and Development of PPP-supported Infrastructure initiatives.

The formalized MoU encompasses the following areas of collaboration: 1) Financing of Viable Projects under the Energy Transition Mechanism (ETM) Country Platform of the Government of Indonesia; 2) Financing to   State-Owned Enterprises, Private Sector, and Regional Governments; 3) Capacity Building, Workshops, and Training in Islamic Finance; 4)  Development of Shari’ah-compliant Financing Products, and 5) Support for PT SMI Shari’ah Business Development.

During the signing ceremony, H.E. Dr. Muhammad Al Jasser lauded Indonesia as one of the Member Countries effectively focusing on Just Energy Transition as one of its topmost priorities.

“Energy transition and climate action cannot be achieved by governments alone. Partnerships with local and international entities are vital to unlocking and harnessing institutional and private investor assets. Therefore, IsDB Group is proud to have recently launched the 2022-2025 Member Country Partnership Strategy (MCPS) with the Government of Indonesia that spotlights and advocates supporting the Government’s noble aspirations of securing Green and Sustainable Infrastructure and Comprehensive Human Development, with a strong emphasis on climate change mitigation, climate adaptation, decarbonization, and just energy transition.” IsDB President stated. 

Furthermore, Dr. Al Jasser stated that the 2022-2025 MCPS envisions helping Indonesia leverage the growing role of Islamic Green Finance and Sukuk, in achieving the energy transition to cleaner energy in a measurable, gradual and affordable manner: for the communities, businesses, and the state budget in the medium and long term. Consequently, by signing the MoU, IsDB and PT SMI will support the country’s just energy transition to achieve its National Determined Contributions (NDC) and Net-Zero Emissions (NZE), and SDG targets.

Meantime, Edwin Syahruzad, President Director of PT SMI, mentioned that as the development financing institution in Indonesia and as ETM Country Platform Manager mandated by the Ministry of Finance, PT SMI offers various Shari’a-compliant financing products for development-related projects. Therefore, PT SMI is ready to partner with various institutions from multilateral and bilateral donors, philanthropies, and banks to mobilize various types of public and private funds in order to support sustainable development, especially the energy transition agenda of Indonesia. “PT SMI is honored to announce its collaboration with IsDB and this also marks the journey of both parties to jointly implement the ETM in a just and affordable way, to achieve the sustainable development of Indonesia,” he noted.

The MoU signing ceremony with PT SMI took place as part of the official high-level visit program of H.E. Dr. Muhammad Al Jasser at the G20 Summit of Heads of State, taking place in Bali, Indonesia, on 15-16 November 2022.