JETP: Norway Invests $25 Million in Indonesia's Solar Power Development

Norway recently announced an investment of around $25 million for Indonesia's solar power development as part of the climate financing package Just Energy Transition Partnership (JETP).

The Norwegian Climate Investment Fund, managed by Norfund, led the first JETP equity investment in Indonesia. Norway announced the investment during Norwegian Energy Minister Terje Aasland's visit to Indonesia in July.

“Norway and Indonesia are close partners in the transition to renewable energy. This most recent investment is testimony of Norway’s commitment to support Indonesia as a member of the JETP,” Norwegian Ambassador to Indonesia Rut Krüger Giverin was quoted as saying in a recent press statement.

Norway and Indonesia have been close energy partners for the past 30 years, marked by the signing of an MoU on bilateral energy consultations in 1995. In later years, several leading Norwegian companies in renewable energy and low-carbon technologies are looking at investment opportunities in Indonesia.

Norway is a member of the International Partners Group (IPG) in Indonesia’s JETP. It has pledged up to NOK 2.5 billion ($230 million as per July 2024 exchange rate) in the form of equity investment from the Norwegian Climate Investment Fund.

The $25 million investment in Indonesia’s renewable energy start-up Xurya will support new solar projects in Indonesia. Norfund led the funding round, which included Swedfund, Climate Capital as the manager of Southeast Asian Clean Energy Fund (SEACEF) II, British International Investment (BII) and AC Ventures. In total, Xurya has received an additional $55 million of investment in this round.

“Norfund is thrilled to lead this investment round in Xurya, mobilizing private and public capital into a company that is making vital contributions to the energy transition in Indonesia. The investment is a perfect fit with the mandate of the Climate Investment Fund of contributing to avoiding greenhouse gas emissions by investing in renewable energy in emerging markets,” said Anders Blom, Senior Vice President, Renewable Energy at Norfund.

Xurya was established in 2018 and has more than 170 solar power projects distributed across Indonesia. It is the first renewable energy company in Indonesia to receive direct funding from the Norwegian Climate Investment Fund, according to the press release.