Indonesia Solar Loan Programme
The Indonesia Solar Loan (ISL) Programme was a support programme to help develop a competitive credit market for Solar Energy Technology (SET) in Indonesia. Initiated by UNEP with the support of the German Government, the programme was supporting the mainstreaming and commercialisation of SET lending through local financial institutions (FIs) while increasing its outreach to rural and low-income areas that would benefit most from the technology’s application.
Energy access is a key driver for dynamic economy growth, quality of life, and commercial competitiveness, yet more than 90 million Indonesians currently live without on-grid electricity access, while the country’s rate of energy consumption is increasing by 7% annually. Improved access and use of clean renewable technologies like SET is therefore of chief importance in tackling the rise of energy demand while diversifying energy portfolio beyond oil and gas.
The ISL Programme aimed to jointly with partner FIs and SET vendors design an innovative financial support mechanism to increase dissemination of SET to Indonesia’s rural and peri-urban low income areas. Depending on local market conditions, the programme aimed to build a solid portfolio of pilot project installations with an eye on scale-up and long-term facility operation. Besides providing a ’kick-start’ finance solution, the ISL Programme offered its stakeholders added benefit through awareness-building and services that increase lender’s transactional capacity.
What was in it for end-users or SET vendors?
- Improved access to electricity.
- A reliable energy alternative to grid & fossil fuels that is costly up front but cheaper in the mid-term.
- Improved access to credit, more leverage with UNEP as a partner, liaison with partner financial institution.
- Possibility to further develop the project on a larger (national) scale, and the advantage of being first-mover.
What was the reason for FIs to be interested?
- Raised awareness on solar lending opportunities.
- Free strategic management and advisory in product development and marketing.
- Free banker training on doing solar lending.
- Free market research on solar opportunities.
- Expanded market penetration, regionally or technologically.
- Free vendor qualification and support with community outreach.
The ISL Programme expired at the end of 2011.