Jakarta, wapresri.go.id – We must implement the energy transition to reduce carbon emissions that can exacerbate the impact of climate change. The agreement of countries on energy transition aims at the same point, namely increasing the use of clean energy in a sustainable manner. However, the energy transition policy requires a very large amount of funding.

“The problem is that the government’s budget allocation for energy subsidies is still very large in order to maintain people’s purchasing power, especially when world energy commodity prices skyrocket. So, the financing aspect cannot be separated from discussions related to energy transition policies,” said Vice President (Vice President) KH Ma’ruf Amin when giving a keynote speech at the Energy Transition Working Group (ETWG) G20 Seminar Series, at the Grand Hyatt Hotel, Jakarta, on Wednesday (27/07/2022).

In dealing with these problems, the Vice President emphasized financing with sharia schemes could be used as an alternative source of sustainable energy transition funds.

“One of the rules in sharia is the prohibition of destruction on earth. Preservation is one of the tasks carried out by humans in their worldly life. Therefore, the transition to sustainable energy is in line with sharia principles,” explained the Vice President.

Furthermore, the Vice President revealed that one of the sources of Islamic financing that can be optimized for use is cash waqf. In 2018, the Indonesian Waqf Board stated that the potential for cash waqf in Indonesia reached IDR 180 trillion per year.

“On various occasions, I have stated that waqf funds should not only be used for religious activities, such as building mosques but also could be used in other forms concerning the benefit of mankind, even the sustainability of life in the future. For example, financing of New and Renewable Energy (EBT) projects or investments through the Islamic finance sector whose profits or returns are used to support sustainable energy development, “he explained.

In the event themed “Unlocking Innovative Financing Scheme and Islamic Finance to Accelerate a Just Energy Transition in Emerging Economies”, the Vice President also assessed that sukuk or Islamic bonds have enormous potential as an instrument to raise funds from the public to finance the energy transition.

“For that reason, I ask that the innovation of sukuk products and their promotion be increased so that people can be more interested in this product,” said the Vice President.
Previously, Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said Indonesia needs around US$1 trillion by 2060, to support the transition to clean energy.

“Therefore, we continue to strengthen cooperation with foreign country partners and international financial institutions to find innovative funding mechanisms to meet energy transition financing,” said Arifin.

In addition to the Minister of Energy and Mineral Resources Arifin Tasrif, who was also present at the event, Minister of Finance Sri Mulyani, Chairman of the OJK Board of Commissioners Mahendra Siregar, Lead Co-Chair of T-20 Bambang Brodjonegoro, and Vice President of Islamic Development Bank Dr. Zamir Iqbal.

Meanwhile, present to accompany the Vice President, the Head of the Secretariat of the Vice President Ahmad Erani Yustika, the Special Staff of the Vice President Masduki Baidlowi, the Expert Team of the Vice President Iggi Haruman Achsien, and Plt. Deputy for Economic Policy Support and Competitiveness Improvement M. Zulkarnain. (DMA/LHS-BPMI Setwapres)