Day2 3c PTSMI ETM Update_DTD_FGD ADB v2.pdf

mekanisme

1. Update on Energy Transition Mechanism
Country Platform
6 October 2022
PT Sarana Multi Infrastruktur (Persero)

2. The Achievement of Net Zero Emissions
PT Sarana Multi Infrastruktur (Persero) | 2
The Indonesian Government Commitment in Climate Change
The Indonesian government commits to tackling climate change by taking part in the 2015 Paris Agreement. Indonesia defines its
commitment through target achievement of Nationally Determined Contribution and Net Zero Emissions.
Updated Nationally Determined Contributions (NDC):
Reduction of Green House Gasses of 31.89% Unconditionally and
43.20% with Conditionally with International Support
By
2030
By
2060
Forestry and
Other Land
Uses (FOLU)
Energy
Agriculture
Waste
management
Industrial Process
and Product Uses
Sectors with the largest GHG
emission contribution in Indonesia
The government identified several critical sectorsfor implementing strategic
measures on climate change:

3. PT Sarana Multi Infrastruktur (Persero) | 3
Challenges of Electricity Sector in Indonesia: Oversupply Condition
Increase in oversupply will lead to increase in Take or Pay (TOP) which can have an effect on fiscal cost 
higher fiscal cost in the form of subsidies and compensation.
Coal
63%
Natural gas
18%
Hydro
7%
Renewables
(excluding
hydro)
10% Oil
3%
Indonesia’s electricity generation by source (2022):
63% from coal
Oversupply of Electricity
Average 10 years
Realization
Demand Forecast Electricity Business Plan (EBP) 2015 vs 2019 vs 2021
EBP 2015 - 2024
EBP 2019 - 2028 EBP 2021 - 2030
Current electricity system experiences 40-63% oversupply
Oversupply capacity reaches 8,8 GW – 14,5 GW which will result in average TOP in USD 2.3 billion per year and will reach USD 21.1 billion in
accumulative from 2022 to 2030

4. • Early decommissioning of
inefficient CFPP
PT Sarana Multi Infrastruktur (Persero) | 4
Energy Transition
Scaling up Renewable in Energy
Mixture
Developing
Interconnected Grids
Phase-out of Coal Fired Power
Plants (CFPP)
Saving Up Energy through
Demand-Side energy Efficiency
Measures
Key
Drivers
• Transformation of the energy sector from
fossil-based fuel to zero carbon
• Reduce energy related CO2 emission to limit
climate change
Energy Transition in Indonesia currently focus on phasing out coal or early decommission of inefficient CFPP through Energy Transition
Mechanism (ETM) as a Phase 1 of ETM Staging
• Adding clean energy source in the
energy mixture
• Renewable energy technology
support
Carbon Reduction Fund
(CRF)
Clean Energy Fund
(CEF)
Energy Transition Mechanism (ETM)
Source: IEA Research, Indonesia Decarbonization Plan – Kemenkomarves, UNITAR Research
Energy Transition Concept in Indonesia

5. PT Sarana Multi Infrastruktur (Persero) | 5
Blended Finance Structure on Indonesia Energy Transition Mechanism
(Carbon Reduction Facility)
Carbon Credit Carbon Market Mechanism*
Government of
Indonesia
Philanthropies
Multilateral /
Bilateral
Development
finance, Climate
finance, Impact
fund
SOURCE OF FUNDS
B
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F
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COUNTRY PLATFORM
Facilities Menu
ENERGY TRANSITION PROJECTS
PT PLN Projects
IPP Projects
Low-Cost Refinancing
Impact to Carbon Market
Commercial /
INA Sovereign
Wealth Fund
Or directly to
projects
(Result Based
Lending,
Sustainability
Linked Loan,
Support for
Asset Spin-Off,
etc)
Low Cost Loan,
Guarantee
Equity
Commercial Loan
(Fiscal budget)
De-Risking
Technical Assistance
Country Platform Manager:
PT SMI
Steering Committee:
Government of
Indonesia
B
le
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F
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*) Carbon Trading, Carbon Bond, Result Based Payment, Stand By Buyer
Loan prepayment
B
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p
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Blended finance will be implemented both in funding and financing support by Country Platform Manager

6. Ministry of Finance Decision No. 275/KMK.010/2022 becomes the basis for PT SMI’s assignment as the Energy Transition Mechanism
Country Platform Manager
PT Sarana Multi Infrastruktur (Persero) | 6
PT SMI Has Received The Assignment From The Indonesian Government
Through Ministry Of Finance to Implement ETM Country Platform
Coordinating with stakeholdersto
develop the framework of energy
transition in electricity sector
Conducting comprehensive studies
related to the fiscal support needed for
the energy transition in electricity sector
Formulating the concept to integrate fiscal
support within the Ministry of Finance and other
sources of de-risking facilities to enhance the
involvement of non –state budget financing to
accelerate energy transition in electricity sector
Initiating necessary actionsto
implement the assignments, including
initial collection of data and information
Implementing other activitieswhich in
line with the aforementioned works
The decision of the minister of finance describe PT SMI’s scope of work, as follows:
Comprehensive studies Recommendation Steering Committee
Ministry of Finance
(State Budget)
Fiscal Policy
Agency
1 2Financing Modalities Funds Mobilization
Output

7. 1. Fund raisingfrom commercial lenders/capital market, Multilateral Development Bank (MDB), and Government budgetthrough
Government Investment Fund (OIP)to be blended as loan facility to PLN. Loan will be received by PLN in the form of blended finance
withsetof Disbursement Linked Indicators.
2. PT SMI will arrange a set of Disbursement Linked Indicators with inputs from the Government and International Partners, exclusion list
for the loan’s use of proceed which will be stated in the loan agreement to PLN. PT SMI will monitor the agreed upon Disbursement
Linked Indicators during the loan period.
PT Sarana Multi Infrastruktur (Persero) | 7
International Partner(s)
(MDBs/Private)
Disclaimer: The structure is subject to the fiscal instrument that will be stipulated in MoF Regulation
Transaction Side
Disbursement Linked
Indicator Setup &
Monitoring
2
Blended Finance Structure (1):
Result Based Lending
PT PLN (Persero)
Government Dedicated
Account
(Government Investment Fund)
Loan Drawdown
Blended Finance Pricing
Flow of Fund
On SMI Balance Sheet
Off SMI Balance Sheet
Key element of this structure is to define the Disbursement Linked Indicators to ensure just and affordable transition and
consistent with overall company’s sustainability strategy
1

8. Disclaimer: The structure is subject to the fiscal instrument that will be stipulated in MoF Regulation PT Sarana Multi Infrastruktur (Persero) | 8
Blended Finance Structure(2):
CFPP Divestment (Financing to Investor)
SPV
Investor
In-breng AssetAcquire
Majority (Post-Transaction)Minority (Post-Transaction)
Blended Finance
Pricing
Loan Drawdown
2
6
4
5
1. Fund Raising activity from commercial lenders/capital market, Multilateral Development Bank (MDB), and Government Investment Fund. PT SMI as fund manager (OIP), where the
scope of work, rights & obligations, and KPI of PT SMI as Fund Manager will be determined, will managed Government fund Account. Through the assessment conduct by Fund
Manager (OIP), government provide investment loan facility to Investor. Loan will be received by PLN in the form of blended finance (Commercial + Concessional l +Government) with
set of KPI.
2. PLN will set up a SPV where PLN will carve out selected CFPP assets to the SPV as a capital injection (in-breng asset)
3. PLN will arrange a new Power Purchase Agreement (PPA) with the SPV. The PPA will also regulate arrangements regarding early decommissioning to reduce the economic life of
CFPP and dismantling.
4. PLN will divest majority ownership of SPV to a strategic investor
5. Strategic investor will raise funding to acquire majority ownership of SPV, where SMI will give blended loan financing from international partner(s) fund (on-BS) and Government’s OIP
fund (Off-BS) to the investor.
6. The SPV will operate and start early decommissioning of selected CFPP assets
Transaction Side
This structure will provide benefit to PLN through coal asset divestment
Flow of Fund
On SMI Balance Sheet
1
IPP
or
PPA
Amendment
3
Off SMI Balance Sheet
International Partner(s)
(MDBs/Private)
Government Dedicated
Account
(Government Investment Fund)

9. Disclaimer: The structure is subject to the fiscal instrument that will be stipulated in MoF Regulation PT Sarana Multi Infrastruktur (Persero) | 9
Blended Finance Structure (3):
Acquisition and Refinancing to SPV (IPP Model)
SPV
Share Sales
Acquisition
Refinancing
1
1. INA and SMI will acquire majority portion of CFPP shares in the SPV from the existing IPP investor.
2. Fund Raising activity from commercial lenders/capital market, Multilateral Development Bank (MDB), and Government Investment Fund. PT SMI as fund
manager (OIP), where the scope of work, rights & obligations, and KPI of PT SMI as Fund Manager will be determined, will manage the Government fund
Account. Through the assessment conduct by Fund Manager (OIP), government provide investment loan facility to SPV. Loan will be received by SPV in the
form of blended finance (Commercial + Concessional l +Government) with a set of KPI. The proceed of money will be use as loan refinancing of existing CFPP.
3. SPV will operate CFPP asset until its decommissioning period.
Transaction Side
This structure will provide benefit to IPP through coal asset divestment
Flow of Fund
On SMI Balance Sheet
2
Existing
IPP
Investor(s) PPA
Amendment
Off SMI Balance Sheet
Country Platform
3
International Partner(s)
(MDBs/Private)
Government Dedicated
Account
(Government Investment Fund)
Acquisition

10. PT Sarana Multi Infrastruktur (Persero) | 10
Indicative Commitment to Support ETM Country Platform
No Component MDB Sector ACT MDB Other/ Private GoI* TOTAL
Pillars
Governance
(Reform)
People &
Communities
(Environment
al and Social)
Infrastructure
(Investment)
Component 1: Accelerated Retirement of Coal Plants
1.1PLN RBL
(targeting early retirement 1 GW)
ADB Public 50 600 300 0 950   
1.2PT SMI ETMCP – Facility 1
(PLN Result Based Loan)
ADB Public
50
1 (grant)
50 150 250 500  
1.3IPP CFPP early retirement ADB Private 50 250 0 0 300 
Component 2: Governance, Just Transition and Repurposing
2.1PLN/MEMR Energy Transition P4R
WB Public
30
5 (grant)
400 0 TBD 435 
2.2Just Transition and Repurposing
Investment Project (Phase 1 & 2)
WB Public
180
5 (grant)
415 0 TBD 600  
2.3Prime STeP ADB Public 9 (grant) 140 0 TBD 149 
Component 3: Scaling Up Renewable Energy
3.1Accelerating Storage Deployment
Power and Transport
ADB Private 50 150 300 0 500 
3.2Dispatchable Renewables Program
IFC Private 70 140 350 0 560 
3.3PT SMI ETMCP – Facilities 2 & 3
(Standby Facilities & Loan)
ADB Public 100 100 300 500  
TOTAL 600 2.245 1.400 250 4.635
(In USD Million)

11. Indicative Work Programme of ETM Country Platform
PT Sarana Multi Infrastruktur (Persero) | 11
Transaction
Preparation
Grant Mobilization
Funds Mobilization
Carbon & Just
Transition
2022 2023 2024
Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
PLN Stream: MoU finalization with PLN
Preparation & finalization of RBL scheme
(with ADB assistance)
Asset divestment
IPP Stream: Due diligence completion
Negotiation, terms sheet & final agreement with PLN
Transaction documents finalization & financial close
CWF grant withdrawal 1 & 2
GEAPP grant withdrawal 1,2 & 3
OIP preparation
MoF Approval
State budget allocation & OIP funds mobilization
ADB – RBL design & negotiations
ADB – RBL loan disbursement
Transition Bonds or other commercial fundraising preparation
Develop just & affordable transition framework
GHG emission reduction for CFPP early retirement
MRV system & carbon emmission certification
OJK & MoF consult on transition framework
Study on Narratives and Fiscal SupportSupporting Activity

12. Opportunity of International Support through Country Platform Manager
PT Sarana Multi Infrastruktur (Persero) | 12
Philanthropies
Banks / Financial
Institutions
Bonds
Carbon
Monetization
• Capacity Building
• Technical Assistance Grant
• Investment Grant
Financing Facilities
Capital Market With Guarantee
Carbon Buyer
to reduce transaction cost
concessional loan
concessional source of fund
with guarantee
additional income from
carbon avoidance
International
Counterparties
Supports Needed Expected Outcomes
Investors Equity Investments
concessional source of fund

13. ptsmi.co.id
infralib.ptsmi.co.id
@ptsmi
ptsmi_id
PT Sarana Multi Infrastruktur
(Persero)
Sahid Sudirman Center, 48
th
Floor
Jl. Jenderal Sudirman No. 86
Jakarta 10220, Indonesia
Phone : [phone] (hunting)
Fax : [phone]
Email : [email protected]
PT SaranaMulti Infrastruktur (Persero)
Thank you,