indonesia clean energy development ii (iced ii) quarterly

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INDONESIA CLEAN ENERGY DEVELOPMENT II (ICED II) Quarterly Progress Report FY 2017, Quarter 2 – JANUARY 1 to MARCH 31, 2017 Submission Date: April 23, 2017 Revision 1, November 2017 REDACTED Contract No.: AID-OAA-I-13-00019 Task Order : AID-497-TO-15-00002 Activity Start Date and End Date: May 2015 to May 2020 COR Name: Retno Setianingsih Submitted by: Tetra Tech ES, Inc. USAID Indonesia Clean Energy Development Project II Menara Jamsostek, North Tower, 14th Floor, Jl. Gatot Subroto No.38, Jakarta Selatan 12710 Indonesia Tel. +62-21-5296-2325 | Fax +62-21-5296-2326 www.iced.or.id DISCLAIMER This document is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of Tetra Tech ES Inc. and do not necessarily reflect the views of USAID or the United States Government.

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QUARTERLY PROGRESS REPORT 2 JANUARY–MARCH 2017

July 2008 1

INDONESIA CLEAN ENERGY DEVELOPMENT II (ICED II)

Quarterly Progress Report FY 2017, Quarter 2 – JANUARY 1 to MARCH 31, 2017

Submission Date: April 23, 2017 Revision 1, November 2017 REDACTED Contract No.: AID-OAA-I-13-00019 Task Order : AID-497-TO-15-00002 Activity Start Date and End Date: May 2015 to May 2020 COR Name: Retno Setianingsih Submitted by:

Tetra Tech ES, Inc. USAID Indonesia Clean Energy Development Project II Menara Jamsostek, North Tower, 14th Floor, Jl. Gatot Subroto No.38,

Jakarta Selatan 12710 Indonesia Tel. +62-21-5296-2325 | Fax +62-21-5296-2326 www.iced.or.id

DISCLAIMER This document is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of Tetra Tech ES Inc. and do not necessarily reflect the views of USAID or the United States Government.

i

FY 2017 QUARTERLY PROGRESS REPORT 1 JANUARY 1 TO MARCH 31, 2017 Indonesia Clean Energy Development II (ICED II) Program

Submission Date: April 23, 2017 Revision 1, November 2017 REDACTED

Prepared for: Office of Environment USAID/Indonesia

Prepared by: Tetra Tech ES, Inc. USAID Indonesia Clean Energy Development Project II Menara Jamsostek, North Tower, 14th Floor Jalan Gatot Subroto No. 38 Jakarta Selatan 12710 Indonesia Tel. +62-21-5296-2325 Fax +62-21-5296-2326 www.iced.or.id DISCLAIMER

This document is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of Tetra Tech ES Inc. and do not necessarily reflect the views of USAID or the United States Government.

QUARTERLY PROGRESS REPORT 2 JANUARY–MARCH 2017

2 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ACRONYMS ADS Automated dispatch system AFD Agence Française de Développement/ French Development Agency AMDAL Environmental Impact Assessment/Analisis Mengenai Dampak Lingkungan Bangda Pengembangan Daerah (direktorat jenderal di bawah Kementerian Dalam

Negeri)/Regional Development (directorate general under MoHA) Bappeda Badan Perencanaan Pembangunan Daerah/ Local Development Planning

Agency (at provincial and district levels). Bappenas Badan Perencanaan Pembangunan Nasional/ National Development Planning

Agency BAU Business as usual BCSF Bali Center for Sustainable Finance BIG Badan Informasi Geospasial/Geospatial Information Agency Biro KLIK Communication, Public Information Services, and Cooperation Bureau (under

MEMR)/ Biro Komunikasi, Layanan Informasi Publik, dan Kerja Sama (di bawah Kementerian ESDM)

BKF Badan Kebijakan Fiskal/Fiscal Policy Agency (under Ministry of Finance) BPSDM Badan Pengembangan Sumber Daya Manusia (terdapat di berbagai

kementerian)/Human Resource Capacity Development Agency (exist under various ministries)

CDCS Country Development Cooperation Strategy CED Clean energy development COD Commercial operations date ConEx Conference and Exhibition COR Contracting Officer’s Representative DJK Direktorat Jenderal Kelistrikan (di bawah Kementerian ESDM)/Directorate

General of Electricity (under MEMR) DKE Direktorat Konservasi Energi (di bawah Kementerian ESDM)/Directorate for

Energy Conservation (under MEMR) DEN Dewan Energi Nasional/National Energy Council DFAT Australian Department of Foreign Affairs and Trade DG Directorate General/Direktorat Jenderal Ditjen Direktorat jenderal DO Development Objective EBT Energi Baru Terbarukan/New and Renewable Energy (a division within PLN) EBTKE/NREEC Energi Baru Terbarukan dan Konservasi Energi (direktorat jenderal di bawah

Kementerian ESDM)/New and Renewable Energy and Energy Conservation (directorate general under MEMR)

ERMM/SDEMP Energy Resources, Minerals, and Mining (directorate under Bappenas)/Sumber Daya Energi, Mineral dan Pertambangan (direktorat di bawah Kementerian Perencanaan Pembangunan Nasional/Bappenas)

ESRA Environmental and Social Risk Analysis EUPP Energy Utility Partnership Program FGD Focus group discussion GHG Greenhouse gas

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GIS Geographic information system GIZ Gesellschaft für Internationale Zusammenarbeit/German Corporation for

International Cooperation) GOI Government of Indonesia ICED II USAID’s Indonesia Clean Energy Development Project II IFC International Finance Corporation IPP Independent power producer/Penyedia Listrik Swasta (PLS) IR Intermediate result KLHK Kementerian Lingkungan Hidup dan Kehutanan/Ministry of Environment and

Forestry LEAP Long-Range Energy Alternatives Planning System LED Light emitting diodes LKPP Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah /National Procurement

Policy Agency LPEM FEB UI Lembaga Penyelidikan Ekonomi dan Masyarakat Fakultas Ekonomi dan Bisnis

Universitas Indonesia/Institute for Economic and Social Research Faculty of Economics and Business University of Indonesia

LTSHE Lampu tenaga surya hemat energi/Low energy solar-power lamps M&E Monitoring and evaluation MEMR Ministry of Energy and Mineral Resources/Kementerian Energi dan Sumber

Daya Mineral MER Monitoring, evaluation and reporting MHP Mini-hydro power MoEF Ministry of Environment and Forestry/Kementerian Lingkungan Hidup dan

Kehutanan MoHA Ministry of Home Affairs/Kementerial Dalam Negeri MoU Memorandum of understanding MSW Municipal solid waste MW Megawatt NTB Nusa Tenggara Barat/West Nusa Tenggara NTT Nusa Tenggara Timor/East Nusa Tenggara PPI Pengendalian Perubahan Iklim/Climate Change Adaptation (directorate general

under MoEF) PoDes Potensi desa/Village potential statistics POJK Peraturan Otoritas Jasa Keuangan/Regulation of Indonesia’s Financial Services

Authority POME Palm oil mill effluent MER Monitoring Evaluation Reporting MoHA Ministry of Home Affairs/Kementerian Dalam Negeri NREEC New Renewable Energy and Energy Conservation/Energi Baru Terbarukan dan

Konservasi Energi (EBTKE) OJK Otoritas Jasa Keuangan /Indonesia’s Financial Services Authority PLN Perusahaan Listrik Negara/State Electricity Company PPA Power purchase agreement PPSDM Pusat Pengembangan Sumber Daya Manusia/Center for Human Resource

Capacity Development PTPN X PT. Perkebunan Nusantara X/State-owned Plantation Firm X

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P2RUED Tim Pembinaan Penyusunan Rencana Umum Energi Daerah/Supervisory Team for Regional Energy Plan Development/

PV Photovoltaic RAD-GRK Local Action Plan for Low Emission Development/Rencana Aksi Daerah Gas

Rumah Kaca RAN-GRK National Action Plan for Low Emission Development/Rencana Aksi Nasional Gas

Rumah Kaca RDPT-ET Clean Energy Asset Based Mutual Fund/Reksa Dana Penyertaan Terbatas untuk

Energi Terbarukan REGP Renewable Energy Generation Plants RPJMD Rencana Pembangunan Jangka Menengah Daerah/Provincial Medium-Term

Development Plans RPJMN Rencana Pembangunan Jangka Menengah Nasional/National Medium-Term

Development Plan RUED Rencana Umum Energy Daerah/Regional Energy Planning RUEN Rencana Umum Energy Nasional /National Energy Planning RUKD Rencana Umum Kelistrikan Daerah/Regional Electricity Plan RUPTL Rencana Umum Penyediaan Tenaga Listrik /PLN’s Power Supply Business Plan SDEMP Sumber Daya Energi, Mineral dan Pertambangan (direktorat di bawah

Kementerian Perencanaan Pembangunan Nasional/Bappenas)/ Energy Resources, Minerals, and Mining (directorate under Bappenas)

SDG Sustainable Development Goals SekRAN Sekretariat Rencana Aksi Nasional Gas Rumah Kaca (di bawah

Bappenas)/Secretariat of the National Action Plan for Low Emission Development (under Bappenas)

SNT Sulawesi Nusa Tenggara Tim Teknis USAID-GoI Clean Energy Working Group TNA Training needs assessment TWG Technical Working Group UEEP Utility Executive Exchange Program UGM University of Gajah Mada UI University of Indonesia UKCCU United Kingdom Climate Change Unit UKL-UPL Environmental Management Efforts and Environmental Monitoring

Efforts/Upaya Pengelolaan Lingkungan Hidup dan Upaya Pemantauan Lingkungan Hidup/Upaya Pengelolaan Lingkungan Hidup dan Upaya Pemantauan Lingkungan Hidup

UNDP United Nations Development Programme USAID United States Agency for International Development USG United States Government WWF World Wildlife Fund

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TABLE OF CONTENTS EXECUTIVE SUMMARY ............................................................................................................. 1

RINGKASAN EKSEKUTIF ......................................................................................................... 4

1. INTRODUCTION ..................................................................................................................... 8

About ICED II Project .............................................................................................................................................................. 8 About this report ...................................................................................................................................................................... 9

2. SUMMARY OF KEY ACTIVITIES AND ACHIEVEMENTS ............................................. 10

Component 1: Improve the Enabling Environment for Rapid Co-Investment in Clean Energy ................... 10 Main Accomplishments .................................................................................................................................................... 10 Task 1.1: Increase Capacity for Low Emissions Energy Sector Planning and Implementation .................... 11 Task 1.2: Policy and Regulatory Reform Support for Clean Energy Project Development ........................ 14

Component 2: Accelerate the Mobilization of Private and Public Sector Co-Investment in Clean Energy21 Main Accomplishments .................................................................................................................................................... 21 Task 2.1: Advanced Project Development and Investment Promotion ............................................................ 21 Task 2.2. Increased Local Capacity of Science, Technology, Innovation and Human Resources for Clean Energy Growth ....................................................................................................................................................... 27

Component 3: Outreach on USAID and USG Inter-Agency Activities in Indonesia’s Energy Sector ......... 31 Main Accomplishments .................................................................................................................................................... 31 Task 3.1: Assist an Annual Coordination Forum of USG Agencies Engaged in Indonesia’s Climate Change Mitigation and Clean Energy Activities ....................................................................................................... 31 Task 3.2: Develop a System to Document, Track and Monitor the Progress of Projects Assisted Under Previous USAID Clean Energy Programs and the ICED II Pipeline ..................................................................... 31 Task 3.3: Manage, Improve and Expand the Clean Energy Website Developed by the ICED Project ... 31 Task 3.4: Identify Areas of Collaboration with Other USAID and USG Programs and Develop Joint Initiatives .............................................................................................................................................................................. 32 Task 3.5: Identify Areas of Collaboration with Other Donors/International Finance Institutions and Develop Joint Activities ................................................................................................................................................... 33 Task 3.6: Support USAID and GOI Clean Energy Working Group Established under the CDCS ............ 33 Task 3.7: Annual Renewable Energy Power Update (additional activity) ........................................................ 34 Task 3.8: Other ICED II Outreach Activity .................................................................................................................. 34

Clean Energy Technology and Innovation Fund (CETIF) .......................................................................................... 36 Gender Action Program ...................................................................................................................................................... 36

3. PERFORMANCE INDICATOR RESULTS AGAINST TARGETS ................................... 37

4. PLANS FOR NEXT QUARTER ........................................................................................... 52

Component 1: Improve the Enabling Environment for Rapid Co-Investment in Clean Energy .................. 52 Task 1.1: Increase Capacity for Low Emissions Energy Sector Planning and Implementation .................. 52 Task 1.2: Policy and Regulatory Reform Support for Clean Energy Project Development ....................... 53

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Component 2: Accelerate the Mobilization of Private and Public Sector Co-Investment in Clean Energy54 Task 2.1: Advanced Project Development and Investment Promotion ........................................................... 54 Task 2.2: Increased Local Capacity of Science, Technology, Innovation and Human Resources for Clean Energy Growth ....................................................................................................................................................... 55

Component 3: Outreach on USAID and USG Inter-Agency Activities in Indonesia’s Energy Sector ........ 56

5. PROBLEM RESOLUTION ................................................................................................... 58

7. SUCCESS STORIES .............................................................................................................. 62

ANNEX A: ICED II TECHNICAL ASSISTANCE ................................................................... 65

ANNEX B: REFERENCE INFORMATION FOR PERFORMANCE INDICATORS AND RESULTS ................................................................................................................................. 66

B.1 Projects Assisted ............................................................................................................................................................. 66 B2. Programmatic support ................................................................................................................................................. 66 B3. Institution with improved capacity ........................................................................................................................... 66 B4. Laws, policies, plans, strategies, or standard ........................................................................................................ 66 B.5 Training ............................................................................................................................................................................. 67

ANNEX C: LIST OF TRAININGS ............................................................................................ 68

ANNEX D: GENDER SELF EFFICACY ASSESSMENT........................................................ 70

ANNEX E: ICED II CLEAN ENERGY PROJECT PIPELINE .................................................. 71

1 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

EXECUTIVE SUMMARY Technical Developments This quarter, four renewable energy projects that received technical assistance from ICED II reached commercial operation date (COD). They are one on-grid mini hydro power plants with 0.6 MW capacity, one on-grid solar PV power plant with 1 MWp capacity, and two off-grid biogas power project with 3.8 MW total capacity. Other notable achievements this quarter were the financial closure of phase 1 of the Supreme Energy Muara Laboh Geothermal Project (80 MW), and funds leveraged by five on-grid mini hydro power plant projects after receiving committed grants from Millennium Challenge Account – Indonesia. Other technical assistance that ICED II provided was the development of an engineering cost estimation model used by the State Electricity Company (PLN) in evaluating four solar photovoltaic (PV) power plant projects in Minahasa (10 MWp), Gorontalo (20 MWp), Bima (10 MWp), and Lombok (20 MWp). The assistance further facilitated solar PV investment and tariff calculation for those projects. Within this quarter, ICED II also reached agreement with PLN to collaborate of various activities, among others, the interconnection study, review feasibility study of hybrid power projects, and update geographic information system (GIS) map of PLN’s 20 kV grid. Policy and Planning A breakthrough in this quarter was the release of Presidential Regulation No. 22/2017 on National Energy Plan (RUEN) in early March 2017. ICED II contributed in the development of RUEN through updating the database, reviewing RUEN energy model and developing the narrative section. All of these became part of the attachment to the Presidential Regulation. Along the line of this new regulation and the Regional Energy Plan (RUED), the Ministry of Energy and Mineral Resources (MEMR) and the National Energy Council (DEN) General Secretary formally introduced the RUED Provincial Starter Kit in a workshop on RUEN in March 2017, where ICED II contributed in developing the data set, energy model and four guidelines in the kit. The Presidential Regulation on RUEN is Indonesia’s first regulation on energy planning. It will drive local governments to develop their own RUED. Both RUEN and RUED are expected to help Indonesia achieving its target of 23 percent of renewable energy in national energy mix, as stated in the National Energy Policy. Apart from that, ICED II proposed a draft of Monitoring Evaluation Reporting (MER) of National Action Plan/Local Action Plan for Low Emission Development (RAN/RAD GRK) that will improve previous practice of using MER RAD GRK for national-level reporting. As for rural electrification, this quarter ICED II submitted its first deliverable to Ditjen Ketenagalistrikan (Directorate General of Electricity) of MEMR containing (i) Guideline on

ICED II Clean Energy Project Pipeline • 188 clean energy projects • 2,573 MW generating capacity • $1.4 million investment • 8.1 million tons CO2e/year reduced • 24 million persons with access to clean

energy

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Geospatial Mapping of Electrification Data, (ii) Guideline on Geospatial mapping of 20 kV Electricity Network, (iii) Dataset and geospatial map of electrification status in six provinces (Aceh, North Sumatra, Riau, Lampung, South Sulawesi, and Central Sulawesi), and (iv) Geospatial map of 20 kV electricity network in three provinces (Aceh, North Sumatra and Riau). With regards to sustainable finance, as Indonesia’s Financial Services Authority (OJK) plans to release its Regulation on Sustainable Finance in 2017, green lending portfolio of the financial institutions becomes an important indicator to measure sustainable financing. This quarter, ICED II developed a report on green lending baseline survey titled “Defining Green Lending Criteria for Developing Baseline Survey on Green Portfolio of Banks in Indonesia: A Preliminary Literature Review” in an effort to establish a basis for evaluating the green lending portfolio of financial institutions. Capacity Building This quarter, ICED II conducted five trainings to various stakeholders i.e. MEMR, National Development Planning Agency (Bappenas), local governments, Bank Sumut, and Bank BRI. The trainings covered from sustainable financing to mini hydro power. The five trainings were: 1) Key Aspect in Assessing Mini Hydro Power and Solar PV Power (Individual Banks Training - Batch 1), 2) Training of Trainer Electrification Mapping (Basic), 3) Training Individual Banks on Renewable Energy Business Overview and Risks (Batch 2), 4) RUED National Kick-Off Meeting with 34 Provinces, and 5) The United States Clean Energy Executive Exchange to California, USA. As many as 193 men and 41 women took part in ICED II’s capacity building activities. Plans for Next Quarter ICED II will continue providing technical assistance to the Joint Secretariat of Energy Planning on RUEN implementation and continue working with Bappenas, MEMR, and National Energy Council to develop RUED training modules. The support for Bappenas will include supporting event for MER on 2017 Assistance and Evaluation of 34 provinces will also be introduced to provincial RUED to meet electrification targets. ICED II is also committed to continue supporting OJK to implement the Indonesia Sustainable Finance Roadmap 2013-2019, especially with the coming Regulation on Sustainable Finance in 2017. ICED II will support PLN in its implementation of MEMR Regulation Number 12/2017 on purchasing electricity from renewable energy projects. We will continue to provide technical assistance to clean energy project developers, as well as PLN by working to solve grid interconnection issues, updating 20 kV digital data, and developing digital data for 20 kV distribution line, especially in ICED II focused areas. In addition, capacity building activities will continue for OJK, PLN, and Center for Human Resource Capacity Development (PPSDM) of MEMR.

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The ICED II Pipeline as of March 31, 2017

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RINGKASAN EKSEKUTIF Perkembangan Teknis Pada kuartal ini, empat proyek energi terbarukan yang memperoleh bantuan teknis dari ICED II mencapai commercial operation date (COD). Mereka adalah satu proyek pembangkit listrik mini hidro on-grid berkapasitas 0,6 MW, satu proyek tenaga surya fotovoltaik on-grid berkapasitas 1 MWp, serta dua proyek pembangkit listrik tenaga biogas off-grid dengan total kapasitas 3,8 MW. Capaian lain dari proyek pada kuartal ini adalah financial closure dari fase 1 proyek tenaga panas bumi Supreme Energy Muara Laboh berkapasitas 80 MW dan memperoleh dana sebagai leveraged funds dari lima proyek pembangkit listrik mini hidro yang berhasil memperoleh committed grants dari Millennium Challenge Account – Indonesia. Bantuan teknis lain yang ICED II berikan adalah pengembangan engineering cost estimation model yang digunakan Perusahaan Listrik Negara (PLN) untuk mengevaluasi empat proyek pembangkit listrik tenaga surya di Minahasa (10 MWp), Gorontalo (20 MWp), Bima (10 MWp) dan Lombok (20 MWp). Bantuan tersebut membantu perhitungan tarif dan biaya investasi teknologi tenaga surya untuk keempat proyek tersebut. Pada kuartal ini, ICED II juga mencapai kesepakatan dengan PLN untuk bekerja sama dalam berbagai kegiatan, antara lain studi interkoneksi, mengkaji studi kelayakan proyek pembangkit listrik tenaga hibrida dan memperbarui peta sistem informasi geografis (GIS) dari jaringan 20 kV milik PLN. Kebijakan dan Perencanaan Terobosan yang muncul dalam kuartal ini adalah peluncuran Peraturan Presiden No. 22/2017 tentang Rencana Umum Energi Nasional (RUEN) pada awal Maret 2017. ICED II berkontribusi bagi pengembangan RUEN melalui pekerjaan pembaruan basis data, kaji ulang model energi RUEN dan pengembangan bagian narasi dari dokumen tersebut. Seluruh pekerjaan tersebut menjadi bagian dari lampiran dari Peraturan Presiden di atas. Sejalan dengan peraturan baru dan Rencana Umum Energi Daerah (RUED), Menteri Energi dan Sumber Daya Mineral (ESDM) dan Sekretariat Jenderal Dewan Energi Nasional (DEN) secara resmi memperkenalkan Starter Kit Provinsi untuk RUED dalam sebuah lokakarya tentang RUEN pada Maret 2017. Dalam lokakarya tersebut, ICED II memberikan kontribusi bagi pengembangan data set model energi dan empat panduan dalam starter kit. Peraturan Pemerintah tentang RUEN adalah peraturan pertama di Indonesia tentang perencanaan energi. Peraturan tersebut akan membantu pemerintah daerah untuk mengembangkan RUED mereka. Dokumen RUEN dan RUED diharapakan membantu Indonesia mencapai target 23 persen energi terbarukan dalam bauran energi nasional, seperti yang tercantum dalam Kebijakan Energi Nasional (KEN). Selain itu, ICED II mengajukan draf Monitoring Evaluation Reporting (MER) dari Rencana Aksi Nasional/Rencana Aksi Daerah Gas Rumah Kaca (RAN/RAD GRK) yang akan memperbaiki pelaporan MER RAD GRK untuk tingkat nasional.

Pipeline Proyek Energi Bersih ICED II

• 188 proyek energi bersih • 2.573 MW kapasitas pembangkit • USD 1,4 juta investasi • 8,1 juta ton CO2e /tahun berkurang • 24 juta orang memperoleh akses energi

bersih

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Mengenai elektrifikasi desa, pada kuartal ini ICED II menyerahkan paket pekerjaan pertama ke Direktorat Jenderal Ketenagalistrikan (DJK) dari Kementerian ESDM yang berisi: (1) Panduan Pemetaan Geospasial Data Elektrifikasi, (ii) Panduan Pemetaan Geospasial Jaringan Listrik 20 kV, (iii) Data set dan peta geospasial dari status elektrifikasi di enam provinsi (Aceh, Sumatera Utara, Riau, Lampung, Sulawesi Selatan dan Sulawesi Tengah), dan (iv) Peta Geospasial dari jaringan listrik 20 kV di tiga provinsi (Aceh, Sumatera Utara dan Riau). Dalam bidang keuangan berkelanjutan (sustainable finance), sejalan dengan rencana Otoritas Jasa Keuangan (OJK) meluncurkan Peraturan OJK 2017 tentang Keuangan Berkelanjutan, portofolio green lending dari lembaga keuangan menjadi indikator penting untuk mengukur perkembangan keuangan berkelanjutan. Pada kuartal ini, ICED II mengembangkan laporan tentang survai dasar green lending berjudul “Defining Green Lending Criteria for Developing Baseline Survey on Green Portfolio of Banks in Indonesia: A Preliminary Literature Review”. Ini adalah salah satu usaha untuk membangun dasar bagi evaluasi portofolio green lending dari lembaga keuangan. Peningkatan Kapasitas Pada kuartal ini, ICED II menyelenggarakan lima pelatihan bagi beberapa pemangku kepentingan, antara lain Kementerian ESDM, Badan Perencanaan Pembangunan Nasional (Bappenas), pemerintah daerah, Bank Sumut dan Bank BRI. Pelatihan tersebut tentang keuangan berkelanjutan hingga pembangkit listrik tenaga mini hidro. Kelima pelatihan tersebut adalah: 1) Aspek Penting untuk Menilai Pembangkit Listrik Tenaga Mini Hidro dan Tenaga Surya (Pelatihan untuk Bank – Angkatan Pertama), 2) Pelatihan untuk Pelatih tentang Pemetaan Elektrifikasi (Dasar), 3) Pelatihan untuk Bank tentang Gambaran Bisnis Energi Terbarukan dan Risikonya (Angkatan 2), 4) Rapat Kick-off Nasional RUED dengan 34 Provinsi dan 5) The United States Clean Energy Executive Exchange to California, USA. Sebanyak 193 lelaki dan 41 perempuan ambil bagian dalam kegiatan peningkatan kapasitas yang diadakan ICED II. Rencana Kuartal Depan ICED II akan terus memberikan bantuan teknis kepada Sekretariat Bersama dari Perencanaan Energi tentang pelaksanaan RUEN dan terus bekerja dengan Bappenas, Kementerian ESDM dan DEN untuk mengembangkan modul pelatihan RUED. Dukungan bagi Bappenas akan berupa dukungan acara MER untuk Evaluasi dan Bantuan selama tahun 2017 bagi 34 provinsi, serta mempersiapkan laporan tentang kemajuan kajian, peningkatan kapasitas dan revisi RAN/RAD GRK untuk sektor energi. Pada tingkat daerah, ICED II berencana mendukung Badan Perencanaan Pembangunan Daerah (Bappeda) untuk memperbarui laporan RAD GRK mereka. Elektrifikasi Pedesaan (rural electrification) juga akan dikenalkan kepada RUED di tingkat provinsi demi membantu pemenuhan target elektrifikasi. ICED II juga berkomitmen mendukung OJK melaksanakan Indonesia Sustainable Finance Roadmap 2013-2019, khususnya dengan akan diterbitkannya Peraturan OJK 2017 tentang Keuangan Berkelanjutan. ICED II akan terus mendukung PLN dalam pelaksanaan Peraturan Menteri No. 12/2017 tentang pembelian listrik dari proyek energi terbarukan. ICED II akan terus memberikan bantuan teknnis bagi pengembang proyek energi bersih, serta PLN untuk mengatasi masalah interkoneksi

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jaringan, memperbarui data digital dari jaringan 20 kV dan mengembangkan data digital untuk jaringan distribusi 20 kV, terutama di wilayah fokus ICED II. Selain itu, kegiatan peningkatan kapasitas juga akan terus berjalan bagi OJK, PLN dan Pusat Pengembangan Sumber Daya Manusia (PPSDM) dari ESDM.

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Pipeline Proyek ICED II per 31 Maret 2017

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1. INTRODUCTION About ICED II Project

The Indonesia Clean Energy Development II Project (ICED II) is a five-year program (May 2015 – May 2020) funded by the U.S. Agency for International Development (USAID). ICED II is designed to assist the Government of Indonesia (GOI) in establishing an effective policy, regulatory and incentive environment for low-emission growth in the energy sector, while simultaneously attracting public and private sector investment in clean energy development. In recognition of USAID/Indonesia’s increased emphasis on science, technology, and innovation, ICED II is also expected to support technological and human capacity advancements in the clean energy space. ICED II builds on the progress made and lessons learned under USAID/Indonesia’s Clean Energy Development (CED) initiative. CED – which falls under the Agency’s Country Development Cooperation Strategy (CDCS) for 2010-2014 – comprises four projects: 1) Indonesia Clean Energy Development (ICED) Project, 2) Capacity for Indonesian Reduction of Carbon in Land Use and Energy (CIRCLE) Project, 3) U.S.-Indonesia Geothermal Education Capacity Building Program, and 4) the Energy Utility Partnership Program (EUPP) between PLN and Hawai’i Electric Company. ICED II is viewed as a “follow on” project to ICED, which ended on February 17, 2015. ICED II gives special attention to the status of ICED interventions at the project’s end (as documented in the ICED final report), the changes that have occurred both within GOI partners and the clean energy market, re-engaging with ICED public and private sector partners, and positioning ICED II to take advantage of ICED’s momentum toward achieving ICED II’s objectives and target results. ICED II directly supports USAID/Indonesia’s Development Objective (DO) 3 of the 2014-2018 CDCS: “Global Development Priorities of Mutual Interest Advanced.” The ICED II Project’s objective and associated tasks are linked to DO3’s Intermediate Result (IR) 3.3: “Climate Change Mitigation and Resilience to Support a Green Economy Strengthened,” and Sub-IR 3.3.1: “Foundation for Low Carbon Energy System Strengthened.” The overall goal of ICED II is to strengthen the foundation for a low-carbon energy system in Indonesia. Its components contribute to the GOI’s established targets for enhancing access/security within the sector, while concurrently supporting national efforts to curb greenhouse gas (GHG) emissions. At its completion, ICED II must achieve the following high-level results:

1. At least 4.5 million tons of GHG emissions, estimated in metric tons of CO2e, reduced, sequestered, and/or avoided as a result of US Government (USG) assistance.

2. At least $800 million of investment mobilized from private and public sources for climate change mitigation as supported by USG assistance.

3. At least an additional 5 million people with access to clean energy.

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4. At least 20 institutions with improved capacity to address climate change issues as a result of USG assistance.

5. At least 20 laws, policies, strategies, plans, or regulations addressing climate change mitigation officially proposed, adopted, or implemented as a result of USG assistance.

In addition, ICED II has a number of component- (or task-) level objectives and “targeted results.” These are listed in Section 2 of the Annual Work Plan. Note that the “high level” and “targeted” results are described in more detail in the ICED II Monitoring and Evaluation (M&E) Plan. Each year’s expected contributions to the life-of-project results are contained in the Annual Work Plan. ICED II is implemented through three parallel and complementary components:

• Component 1: Improve the enabling environment for rapid co-investment in clean energy

• Component 2: Accelerate the mobilization of private and public sector co-investment in clean energy

• Component 3: Outreach on USAID and USG inter-agency activities in Indonesia’s energy sector.

ICED II also operates a Clean Energy Technology and Innovation Fund that is used to augment project interventions. The purpose of the Innovation Fund is to be a flexible means, where necessary and/or useful to the project’s objectives, to encourage participation and/or collaboration of private sector and local entities toward the achievement of ICED II’s components and tasks. ICED II provides a combination of short- and long-term technical assistance to the Ministry of Energy and Mineral Resources, PLN the National Utility Company (PLN), and selected provincial and regency (kabupaten) governments, the National Development Planning Agency (BAPPENAS), OJK (the Financial Services Authority), other sectoral ministries and authorities, and the private sector.

About this report

This report covers ICED II activities during the three-month period from January 1, to March 31, 2017 (Quarter 2 of the 2017 U.S. Government’s fiscal year). Section 2 describes ICED II’s activities for the quarter by component and major work streams based on the ICED II scope of work. It also describes the main accomplishments during the period. Section 3 shows the progress ICED II has made toward achieving its target results, which are measured by 11 performance indicators. The project plans for next quarter are laid out in Section 4, while the main challenges that the project has faced and proposed solutions are presented in Section 5. Section 6 contains the success stories of this quarter. The annexes provide quantitative data on ICED II’s technical assistance for the quarter (Annex A), reference information for performance indicators and results (Annex B), training summary and detailed training activities (Annex C), and the ICED II Pipeline of projects (Annex D).

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2. SUMMARY OF KEY ACTIVITIES AND ACHIEVEMENTS

Component 1: Improve the Enabling Environment for Rapid Co-Investment in Clean Energy

Main Accomplishments

• RAN/RAD-GRK:

o Proposed the Draft MER RAN GRK, which improved the previous practice of using the template of MER RAD GRK (sub-national level) for national-level reporting.

• RUEN and RUED: o Presidential Regulation 22/2017 on RUEN was issued in early March 2017. ICED

II previously participated in updating the database, review of the RUEN energy model and developing the narrative section, which all became part of the attachment to the Presidential Regulation.

o The Ministry of Energy and Mineral Resources (MEMR) and the National Energy Council (DEN) General Secretary formally introduced the RUED Provincial Starter Kit in the National Workshop on RUEN Dissemination and Implementation that was held on March 13-15, 2017, and attended by the Head of Provincial Energy Offices. ICED II contributed in developing the data set, energy model and four guidelines in the kit.

o Delivered training for two batches of RUED trainers/facilitators on electrification data processing and geospatial mapping. The training was organized by MEMR Education and Training Center and the Technical Team of the Development of Provincial Energy Plan (P2-RUED). The participants were MEMR staffs.

• Rural Electrification: o Two teams of field surveyor completed their data collection and analysis on

Nias. o ICED II submitted the first deliverable to Ditjen Ketenagalistrikan of MEMR

containing (i) Guideline on Geospatial Mapping of Electrification Data, (ii) Guideline on Geospatial mapping of 20 kV Electricity Network, (iii) Dataset and geospatial map of electrification status in 6 provinces (Aceh, North Sumatera, Riau, Lampung, South Sulawesi, and Central Sulawesi), and (iv) Geospatial map of 20 kV electricity network in 3 provinces (Aceh, North Sumatera and Riau).

o Provided training on electrification data processing and geospatial mapping for the RUED Facilitators from Center for Human Resource Capacity Development of MEMR.

• Sustainable Finance o Developed a report on green lending baseline survey titled “Defining Green

Lending Criteria for Developing Baseline Survey on Green Portfolio of Banks in Indonesia: A Preliminary Literature Review” in an effort to establish a good indicator for green portfolio of financial institutions.

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Task 1.1: Increase Capacity for Low Emissions Energy Sector Planning and Implementation WS 1.1.1: Support Bappenas in streamlining RAD-GRK guidelines and ensuring procedures are communicated effectively to subnational governments This quarter, ICED II supported the National Action Plan/Local Action Plan for Low Emission Development (RAN/RAD GRK) Secretariat in the following aspects:

• Contributed to development of the draft guidelines of Monitoring Evaluation Reporting (MER) of National Action Plan for Low Emission Development (RAN GRK). This guideline aims to improve the previous practice of using the template of MER of National Action Plan for Low Emission Development (RAD GRK) for national-level reporting. Historically, National Development Planning Agency (Bappenas) intentionally made RAD GRK MER in a rather simple template to ease the local government in completing their MER report. On the other hand RAN GRK MER should be made more advance as there are different source of budget and more types of measures at the national level, and also to anticipate the need of Ministry of Environment and Forestry for measurement, reporting and verification (MRV) process. This draft guidelines have not been finalized as Chapter 1 is yet to be completed by the Ministry of Energy and Mineral Resources (MEMR).

• Involved in the preparation of MER RAD GRK online system. An on-going activity is encoding RAD-GRK implementation measures and achievements in 34 provinces during 2010-2015 period, to be part of the online database.

• Compiled business as usual baseline of RAD GRK of the energy sector by province, which can be used as the BAU Baseline energy sector in the Online MER.

The plan for ICED II to co-share in supporting the National Workshop on RAD GRK Review Finalization has not been implemented due to event rescheduling. The RAN/RAD GRK Secretariat has not informed the new date of this event. The plan to support RAD GRK implementation measures is shifted to later time, since ICED II plan to support provincial government in aligning several energy planning work streams. Implementation support would be more strategic for measures accommodated in all provincial plans on energy. WS 1.1.2: Support Local Institutions tasked with operationalizing RAD-GRK mitigation action plans and leading other energy planning process. Regional Energy Plan (RUED). The issuance of Presidential Regulation 22/2017 on the National Energy Plan (RUEN) in early March 2017 marked the start of provincial government’s responsibilities to prepare the provincial energy plan (RUED-P) within one year period, as stipulated in Law 30/2007 on Energy. The process started much later than ICED II expected. The following are ICED II support for RUED development process in this quarter:

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• Provided guide and facilitated the RUED development process. The MEMR and the National Energy Council (DEN) General Secretary formally introduced the RUED Provincial Starter Kit at the National Workshop on RUEN Dissemination and Implementation on March 13-15, 2017. This event was attended by the Head of Provincial Energy Offices. ICED II contributed in developing the data set, energy model and four guidelines in the kit, as well as providing trainers during the workshop.

• Focused at the national level effort to disseminate data and information through the training series attended by the representative of provincial governments, as RUED development process was just started.

• Shifted plans for public exposure of progress to later time as consequently, there has not been any progress on RUED development by the provincial government in this quarter.

• Shifted training and technical assistance for ICED II focus provinces to the next quarter following the delay above.

• Started to collect various energy planning documents of the focus provinces. This is to compare the policy and regulatory framework underlying such documents, scope and content of document. ICED II will try to find common grounds and similar activities as an effort to align the energy plans in available planning documents of each focus province. This analysis will be implemented in the next quarter.

Rural Electrification. ICED II has been conducting the Rural Electrification Study since 2015. For this quarter, the progress of this study is as follows: Electrification planning with focus on Nias Islands.

• Completed Nias data clean-up to reduce discrepancies between the two datasets from BPS, i.e. 2014 Village Potential in spread-sheet and geospatial formats.

• Completed scenario exercises using some assumptions of household electricity demand levels, and two electrification staging approach. These analysis were performed with village-level data in both table and geospatial mapping format.

• Identified villages located near the existing 20 kV network. This is to differentiate options for electrification approach, which may also affect the choice of business model.

• Updated ICED II data on Nias based on the findings of the two teams of field surveyor who completed their data collection in Nias this quarter. They have presented their analysis and submitted their respective draft report as well.

Processing electrification data to facilitate RUED Development. The experience from Nias Electrification Study have been applied to process the datasets and geospatial maps of village electrification in 34 provinces. These data will be part of the starter kit for RUED development and distributed to the respective Provincial Government. A visual representation of the processed data could help a Provincial Government in gathering additional information, develop programs and allocate resources. In addition, they can provide feedback for the National government to improve the provincial data representation. This quarter ICED II have not been active at focus provinces beyond North Sumatra. The engagement with the key stakeholder in all focus provinces will be in line with the RUED development process. Both training and technical assistance for local governments of the focus

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provinces will be in the context of developing RUED and alignment of RUED with other energy planning process or documents. WS 1.1.3: Assist Bappenas, MEMR and PLN in electricity generation and demand-side management planning in developing RUEN, RUKN and RUPTL

National Energy Plan RUEN. Presidential Regulation 22/2017 on the National Energy Plan (RUEN) was issued in early March 2017. ICED II previously participated in updating the database, review of the RUEN energy model and develop the narrative section, which all became part of the attachment of the Presidential Regulation. The issuance of RUEN also marked the start of RUED development process, which -as stipulated by Law 30/2007 on Energy- shall be completed one year after RUEN was made official. Regional Energy Plan (RUED). ICED II have been supporting Bappenas and MEMR in the preparation of RUED development process, long before the formal kick off in mid-March 2017. Together with the National Energy Council they form the Technical Team of the Development of Provincial Energy Plan (P2-RUED). This quarter, ICED II supports for the Technical Team of P2-RUED are as follows:

• ICED II was an active contributor and the only international development partner during the preparation of the provincial data set, energy model and four guidelines. The process involved series of consultative meetings with the technical Team of P2-RUED. The resulted documents have been distributed as the starter kit to assist Provincial Governments in developing RUED.

• ICED II also delivered two (2) batches of training for RUED trainers/facilitators on electrification. The training was organized by MEMR Education and Training Center and P2-RUED, while the participants were MEMR staffs.

The plan to develop a training module on scenario exercise was not implemented this quarter, due to delay in the initiation of RUED process. The estimated new date is likely on FY4 2018, although ICED II engagement on this subject may start earlier based on the readiness of an individual focus province or other case upon request from P2-RUED. Electricity Planning. Government of Indonesia has set a target of nearly 100% access to electricity by 2020. ICED II were successful in promoting rural electrification to become part of the RUED process. The form of supports to this initiative are:

• ICED II prepared village electrification figures of each province in tabular data and geospatial map, based on the Village Potential Data 2014 from The Central Statistical Agency. By the end of this quarter, ICED II completed electrification data of seventeen (17) provinces and will continue to finalize geospatial data and maps of 17 other provinces in the next quarter.

• ICED II developed a guideline on how to process the raw data of village electrification status. The book has become part of the RUED starter kit for Provincial Governments.

• ICED II developed a guideline on how to prepare a geospatial map of 20 kV electricity network. The experience during ICED previous works in 3 provinces (Aceh, North Sumatera and Riau) were used as a reference. This book has also become part of the RUED starter kit for Provincial Government.

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ICED II also provided trainings for RUED trainers/facilitators on this subject. Earlier in this quarter ICED II shared the village electrification data processing and geospatial maps of six provinces1 with Ditjen Ketenagalistrikan of MEMR. They need to regularly contribute data to complete the Indonesia One Map (part of One Map Policy). ICED II submitted the first deliverable on 16 March 2017, containing the data set of six provinces. Similar data of 11 other provinces has also been offered to Ditjen Ketenagalistrikan. This note is in parallel with Work stream 2.2.4. Renewable Energy Business Model. This quarter, ICED II presented its findings on Nias electrification study to several potential investment companies who were interested in developing renewable energy, hybrid power generation, and/or electrification. It is notably important to discuss the study findings with PLN and this quarter ICED II had already discussed this subject with PLN West Region. However, we have not been able to compare notes with PLN North Sumatra as yet. Task 1.2: Policy and Regulatory Reform Support for Clean Energy Project Development WS 1.2.1: Support the development of specific incentives to stimulate financing streams for clean energy and emission reduction initiatives at the national and local levels White Paper on Alternative Incentives Mechanism. MEMR requests concerning inputs on the alternative incentive mechanisms for renewable energy have not been firmed until the end of this quarter. However, GoI seemed to search for measures with high impact, and the focus of fiscal allocation is currently on major infrastructure development. In the meantime, ICED II have been exploring the possibility to engage international short term technical assistance (STTA) and also the expertise of local legal counsel. Taking into account major policy shift in the energy sector recently, it would be best to identify a clearer signal of policy directive concerning government facilitation for renewable energy to be able to shape the objective of the white paper. Support to New Financing Sources and Products. USAID’s DCA Market Assessment. In this quarter, senior investment officer of Development Credit Authority (DCA) from USAID Washington visited Indonesia to conduct clean energy and energy efficiency market assessment. The objective of the market assessment was to make recommendation in utilizing credit guarantee of DCA in clean energy to mobilize private sector financing. Indonesia clean energy credit guarantee facility is a joint financing between USAID and Australia’s Department of Foreign Affairs and Trade (DFAT). ICED II supported the market assessment by facilitating

1 ICED II met with Ditjen Ketenagalistrikan earlier this quarter. At that time ICED II only completed tabular data and geospatial map sets of six provinces. By the end of this quarter, ICED II has finalized data and maps of 17 provinces and will continue to work on the remaining 11 provinces. This explains the difference in figures (6 and 17).

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series of interviews with ICED II key stakeholders in clean energy and energi efficiency financing, as follows:

1. Otoritas Jasa Keuangan (OJK) 2. Bank Rakyat Indonesia (BRI) 3. Bank Mandiri 4. Bank Central Asia (BCA) 5. Bank Muamalat Indonesia (BMI) 6. Bank Bukopin 7. Medco Energi Hidro Power (Hydro Developer) 8. PT Inti Duta Energi (Hydro Developer) 9. South Pole Group (RE consultant) 10. EPS Capital (ESCO) 11. Contained Energy 12. International Financial Institution (IFC) 13. Agence Française de Développement (AFD) 14. GIZ Indonesian NAMAs Financing Support (INFIS) 15. Green Building Council Indonesia (GBCI)

Previously, USAID’s DCA had made attempts to develop a credit guarantee facility for clean energy financing. Those were conducted in June 2013 through a borrower credit facility with Nusantara Infrastructure and in September 2015 through a loan portfolio guarantee facility with Bank BRI. Unfortunatley both attempts failed due to various reasons with the biggest reason was market uncertainty. In ICED II’s 2017 assessment, we incorporated lesson learned from previous attempts during the interviews. Key findings are as follows:

• Developers admitted difficulties in securing loans from banks due to high risk perception, in particular for construction risk of hydro power plant. Most of existing hydro power projects were proven to have cost overruns, which led to the perception of high risk from lenders’ view. DCA credit guarantee is believed to be able to mitigate such risk by providing loan repayment security during construction period and/or during first year of operations,

• The lenders viewed that some barriers exist, despite enthusiasm among project developers about DCA. They believed that credit guarantee will not have any major role on boosting the implementation of renewable energy unless incentives are available. An example would be Reduction to Risk Weighted Average (RWA), a requirement from Indonesia’s Financial Services Authority (OJK) that will enable more capital utilization. Until now, no banks appear to be providing pure project finance loans. Most loans take some form of collaterals, e.g. project assets, corporate guarantees.

• Banks with sufficient experience in renewable energy, such as Bank Muamalat, are optimistic and expecting a 20-30 percent net increase growth in energy over the next three years (with renewable energy as one of their focus). While most conventional banks, such as BRI, BCA, Bukopin, are more risk-adverse towards renewable energy

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projects and only give loan to renewable energy projects owned by existing debtors with known background and capability. This is during ICED II assessment in QPR 2 2017.

• Financing terms from lenders during 2016 provided seven to eight years tenor, which includes two years grace period with interest charge ranging from 10 to 12.5 percent. The aim of credit guarantee is to extend the length of a tenor (amount of time left for the repayment of a loan or until a financial contract expires). On the other hand, banks tend to stretch out the tenor. Credit guarantee would add transaction cost that is charged to the customer. Banks prefer not to add such cost as it will affect their level of competitiveness.

• Both lenders and project developers acknowledged that clean energy projects could provide positive return for business and the environment. They confirmed that during the last 1.5 years there has been insignificant progress in power purchase agreement (PPA) signing of renewable energy projects. This condition is mainly due to inconsistency in policies and regulations that Ministry of Energy and Mineral Resources (MEMR) and PLN implemented.

• International Finance Corporation (IFC), as the private arm of The World Bank, is interested to enter the already-crowded minihydro power market. They planned to disburse approximately $500 million investment in mini hydro alone, as conducting such transaction would set good example to other banks. IFC acknowledged the risk reward profile is not as strong since the sector is slowing down due to MEMR Regulations number 10 and 12 of 2017. Some projects are still commercially viable, although they highly depend on the PPA signing.

• OJK’s point of view of the sector remains neutral, as the regulation on sustainable finance has not been released. Lending to the renewable energy sector is at a voluntary stage for banks and non-bank financial institutions, as they naturally compete with each other based on market conditions.

• The off-grid/captive power market remained highly underdeveloped in Indonesia. Only one domestic player (Contained Energy) and several international companies provided solar rooftop installations for commercial/industrial clients. No known commercial (non-government) entities are currently working at household level.

• There was a clear development argument for a DCA guarantee in the renewable energy sector. Banks are ready to process renewable energy project proposals. However, in the past three years, the renewable energy market does not seem to grow due to issues at the regulator side. DCA would re-enter the market providing that regulatory environment is more favorable.

• Energy savings companies (ESCOs) have been granted their own registration status by MEMR although there was very low demand for energy efficiency projects. Electricity was perceived as cheap and so the equipments were sourced at cheapest price against higher price with energy savings over time. In addition, project sizes were typically small (less than $2 million).

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• A large cultural shift would have to occur for companies and the government to recognize the value in energy efficiency investments. Given the small project sizes, investors will look to bundle projects, such as working through the government to cover several municipal buildings, airports, and other facilities. Once demand is established, MEMR could provide subsidies/incentives to banks to provide soft loans for companies/building owners so that they can invest in energy efficiency projects to ESCOs.

ICED II observed that there was a mismatch value perception between stakeholders on DCA credit guarantee facility. The common understanding of credit guarantee value is to offset high risk that the banks faced during project construction phase, which in turn will minimize collateral requirement and allow for longer tenor; thus, allowing better fund mobilization in the renewable energy sector. However, this was translated differently among borrowers and lenders. Lenders value is to recognize guarantee as cash collateral that will improve their asset quality than reducing capital requirement. But on the other side, borrowers saw that value happens when the guarantee facility could reduce cost of debt (interest) and/or extend the loan tenor. The mismatch of perceived values adds complication to the implementation of DCA in Indonesia. In order for USAID’s DCA to support the renewable energy sector, three things are identified as the main criteria: • Better transparency in regulations, including formats for auctions, clarity on the

procurement process, better coordination between the MEMR and PLN to release clearer guidelines on pricing and PPAs.

• PLN’s development agenda needs to focus further on renewable energy (direction from MEMR) and PLN’s commercial agenda needs to promote a more market-oriented approach (direction from Ministry of State Owned Enterprise).

• More acceptable pricing than MEMR Regulation No. 12 of 2014 to fit commercial requirements for investors, among other conditions such as PPAs that are too short for individual power producers (IPP) to realize a favorable return.

Figure 1. Value Perception between Stakeholders on DCA Credit Guarantee Facility

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Conclusion from the market assessment is that DCA’s credit guarantee would not result in any additional transactions until the above three criteria are met and/or there are new developments on regulatory side which will enable sizeable clean energy project to materialize. Clean Energy Asset Based Mutual Fund. In the last quarter, OJK approved Nikko Securities’ Clean Energy Asset Based Mutual Fund (Reksa Dana Penyertaan Terbatas untuk Energi Terbarukan, RDPT-ET) license to operate in capital market. ICED II advised several investment strategies to Nikko Securities and facilitated discussions with project developers. This quarter, Nikko Securities and a hydro project developer signed a memorandum of understanding (MoU). The MoU initiated due diligence activities on several hydro project assets that are in operations in North Sumatra. In addition, a solar PV project developer has submitted an investment teaser to Nikko Securities. WS 1.2.2: Support new/improved regulatory framework for renewable energy generating facilities In January 2017 MEMR published two regulations, i.e.

(i) Regulation 10 of 2017, which covers standard terms and conditions in Power Purchase Agreements (PPAs) between PLN and IPPs, including both renewable and non-renewable energy sources, under the scheme of build own operate transfer (BOOT), and

(ii) MEMR Regulation 12 of 2017 concerning the purchase of renewable energy from independent power producers using auction system based on Capacity Quota (for solar PV and wind) and using a reference price based on PLN’s average electricity generation cost or direct appointment mechanism for other resources.

The new regulations reflect a significantly different approach compared to the previous renewable energy development policy, shifting the pricing for renewable energy generated electricity to a discounted “avoided cost” of PLN, and mandating certain terms in the power purchase agreement. Some pilot projects or other form of government-driven initiatives may also be important to bring the challenges to the open and allow for efforts to address them. ICED II plans to continue its dialogue with key stakeholders to facilitate the identification of viable options for renewable energy projects. WS 1.2.3: Assist PLN in implementing GOI policies to increase the contribution of renewable energy Support to PLN on GOI Policy Implementation. ICED II has begun to refocus its support to PLN based on MEMR Regulation 12 of 2017. MEMR Regulation 12/2017 stipulates the new tariff (power purchase price) approach refers to PLN regional generation cost as a reference, while maintaining the previous MEMR Regulation on feed in tariff (FIT) to be active as long as they are in line with the new regulation. The new tariff uses 85 percent of PLN’s average production cost in the geographic area where the proposed project is located or 100 percent of the average production cost if the local cost is less than the average national production cost. Together with MEMR Regulation 38/2016 that allows for non-PLN utility to operate and MEMR Regulation 10/2017 on the major terms of power purchase agreement (PPA) under build own

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operate transfer (BOOT) scheme, these regulations imply a major shift in policy and regulatory framework concerning the use of renewable energy for electricity. The newly published Electricity Power Supply Business Plan (RUPTL) from PLN also indicates major shift of the corporate policy. Among others is their statement on electrification program and the plan for incorporating renewable energy. In light of these major adjustments in the sector, ICED II is assessing the focus of its technical assistance towards new areas for PLN to enable the implementation of this new policy and regulatory framework. Legal Assessment on Hybrid Business Model. This quarter, ICED II was soliciting work on legal assessment of hybrid business model. In March 2017 PLN signed a memorandum of understanding (MoU) with several developer regarding “Feasibillity Study and Analysis of System Stability on Utilization on Hybrid Power Generation”. The MoU identified problems and feasibility of technical issues from engineering point of view, but lacked in providing clear business models and/or legal structure that will facilitate development of hybrid model. We identified that currently there has not been any precedent from PLN in conducting hybrid model within their existing power generation. ICED II started discussions with PLN and some developers regarding this issue. We concluded that it is necesarry also to prepare PLN for legal side for hybrid business structure. ICED II has proposed to undertake legal assessment of contracting hybrid power projects and has planned to engage with PLN next quarter to initate the work. WS 1.2.4: Support OJK’s Sustainable Finance Program and help it formulate guidelines for the financial industry to promote and increase investments in clean energy Green Lending Survey. This quarter, ICED II started a research for green lending baseline. As OJK will release a regulation on sustainable finance, a monitoring framework to evaluate the effectiveness of the regulation is needed. ICED II supported OJK in developing a good performance indicator measurement of financial institution’s green portfolio. The effort to establish a good indicator for green portfolio of financial institution will be useful not only to look at the effectiveness of sustainable finance policy, but also for another purpose such as to design incentive mechanism to promote green lending. In order to serve this purpose, ICED II developed a report on green lending baseline survey titled “Defining Green Lending Criteria for Developing Baseline Survey on Green Portfolio of Banks in Indonesia: A Preliminary Literature Review”. This academic paper comprises of three sections: 1) a brief examination of green economy and green industry definition; 2) the concept of green lending and 3) the methodology used in developing green lending criteria that is expected to be compatible to Indonesian banking market situation. Transitioning into green economies will require fiscal policies and strategies in creating a green industrial system. Such system may involve two methods: “greening” the existing industries or creating “new green industries.” However it is believed that the first method is a core determinant of economic competitiveness and sustainable growth.

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A comprehensive desk study on comparison of established sustainable banking frameworks in other emerging countries was completed. Banks that have already developed a collection of criteria in implementing green lending, green investments, green bonds and green loans were also identified and analyzed along with the definition of each sector. The methodology proposed for Indonesia is: 1) identifying sectors that support green economies, 2) sectors causing environmental impact, and finally, 3) benchmarking green project list and criteria from other financial institutions in other countries that already implemented the green financing. The review outcome were ten Green Project Categories, each with a set of project examples. The research will continue with building a database of Indonesia’s green lending baseline and methodology for reporting and monitoring of green lending. In pursuing the next activity, delays are expected due to OJK’s priority in drafting the sustainable finance regulation. Another barrier that may limit the research is that internally, OJK is in the process of electing new commissioners, thus a structural change is likely to take place. ICED II expects to achieve a significant progress by end of Quarter 3 of Fiscal Year 2017. WS 1.2.5: Within selected provinces, provide assistance in establishing two-way communications channels between subnational entities and national policymakers National and Regional Government Coordination Support. This quarter, MEMR and the National Energy Council General Secretary uses the data sets and guidelines as the starter kit to assist provincial Governments in developing their RUED. ICED II work on village electrification data processing and geospatial mapping has also become part of RUED assignment. Through data availability, the RUED process could highlight the issue of energy management, and facilitate well-informed decision process.

Green Lending Survey: Green Project List Proposed (Priorities)

I. Renewable Energy

II. Energy Efficiency

III. Green Buildings

IV. Waste Management

V. Sustainable Land Use and Management of Natural Resources

VI. Low-carbon

VII. Water and wastewater management

VIII. Climate Change Adaptation

IX P ll ti P ti d t l

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Component 2: Accelerate the Mobilization of Private and Public Sector Co-Investment in Clean Energy

Main Accomplishments

• Four projects that received technical assistance from ICED II reached commercial operation date (COD) in this quarter. These four projects are part of ten projects that received COD in Fiscal Year 2017. They are one on-grid mini hydro power plants with 0.6 MW capacity, one on-grid solar PV power plan with 1 MWp capacity, and two off-grid biogas power project with 3.8 MW total capacity.

• Five on-grid mini hydro power plant projects that received technical assistance from ICED II leveraged funds by receiving $6.86 million of committed grants from Millennium Challenge Account – Indonesia.

• Phase 1 of the Supreme Energy Muara Laboh (SEML) geothermal power plant with generating capacity of 80 MW received financial commitments.

• Four solar photovoltaic (PV) power plant project evalutions in Minahasa (10 MWp), Gorontalo (20 MWp), Bima (10 MWp), and Lombok (20 MWp), that PLN is developing, received technical assistance from ICED II in terms of engineering cost estimation model. The assistance further facilitated solar PV investment and tariff calculation for those projects.

• ICED II reached agreement with State Electricity Company (PLN) to collaborate on these activities: 1) formation of technical working group for conducting Interconnection Guideline Revision, Review Guideline of Interconnection Study Development, and Development of Revision Input of Sulawesi Grid Code; 2) training on guidelines to review mini hydropower feasibility study; 3) preparing guidelines to review feasibility study of biomass, biogas, municipal waste, solar PV power, and hybrid power projects; 4) reviewing feasibility study of hybrid power projects; 5) preparing engineering cost estimation model for hybrid power projects; 6) conducting workshop to update GIS map of PLN’s 20 kV grid in North Sumatra and Aceh, as well as to develop GIS map of PLN’s 20 kV grid for South Sulawesi, West Nusa Tenggara and East Java; and 7) implementing smart grid control pilot project in Kupang and Sumba.

Task 2.1: Advanced Project Development and Investment Promotion WS 2.1.1: Improve and maintain a database of viable clean energy projects (pipeline) with

respective emission reduction contributions This quarter, ICED II completed the update and upload of large amount of data on clean energy projects. Modification of the database included using standard reference of project status and maintaining automatic report generation for all projects. The purpose of the modification is to enable the database to run and generate report of GHG emissions calculation. ICED II presented and demonstrated the application of key features of the database internally. Among those features are spatial viewing, project pipeline status, and project information. At present, users can access the database using different levels of access, from guest, user, to

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administrator. ICED II Clean Energy Database can accurately show number of projects supported, project status, and project location in Google Map (the latter depends on user’s level of access), and project memos of each project supported. Periodical updating of the database will take place every end of quarter, at the minimum, throughout the life of project.

Figure 2. The latest version of ICED II Clean Energy Project Map Database.

Discussion with MEMR regarding database was held through Information and Investment Services (Layanan Informasi dan Investasi- LINTAS) of EBTKE that serves as clearinghouse under the Secretary of Directorate General for EBTKE. They are collaborating with Technischer Überwachungsverein (TÜV) Nord, a German technical service provider, to utilize the model and feature of ICED II Database into their own to boost renewable energy investment in Indonesia. ICED II Clean Energy Database was designed to track and report projects within ICED II’s pipeline. Therefore, ICED II shared its Database Guideline with LINTAS EBTKE for their further reference in developing database for MEMR. WS 2.1.2: Provide advisory services, technical assistance and capacity building to project

developers/sponsors, banks and financial institutions, and equipment suppliers and service providers

Project Advisory Services and Technical Assistance. This quarter, 24 projects, 10 private companies, two banks and one non-bank financial institution, and state-owned companies (PLN, PT. LEN, and Regional Company (Perusahaan Daerah or Perusda) of East Kalimantan) have received project advisory and technical assistance from ICED II. This support resulted in 21 project memo for 15 hydro power projects, two solar photovoltaic (PV) projects, one biogas project, and one biomass project. The banks were Bank Muamalat Indonesia and Bank Negara Indonesia, while the non-bank financial institutions were Indonesia Infrastructure Finance. The majority of the solar PV projects is part of ICED II technical assistance to PLN. Projects Reaching their Commercial Operating Date (COD). Four projects that received technical assistance from ICED II reached commercial operation date (COD) in this quarter. These four projects are part of ten projects that received COD in Fiscal Year 2017. The projects with COD status are one on-grid mini hydro power plants with 0.6 MW capacity, one on-grid solar PV

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power plan with 1 MWp capacity, and two off-grid biogas power project with 3.8 MW total capacity. Below is the list of the projects.

Table 1. Projects Reached COD in FY 2017 [REDACTED]

In February 2017, 1 MWp solar PV power plant located in Hamba Praing, East Sumba, East Nusa Tenggara (Nusa Tenggara Timur or NTT) reached commercial operating date. The produced power is sold to PLN’s power grid in Waingapu, East Sumba, NTT. PT. Buana Energy Surya Persada, a national company, developed the power plant and received technical assistance from ICED II, which included feasibility study review and interconnection study review. Meanwhile PLN also received technical assistance to improve their existing grid so that the grid can fully absorb the power produced by the 1 Mwp power plant. In addition, this quarter ICED II received news from PT. Sinar Mas Agro Resources and Technology Tbk. that received technical assistance during the first phase of ICED project. The palm oil company built two biogas power projects for captive use in their palm oil mills. The projects have successfully reached commercial operating date by December 2015, in the beginning of ICED II. They are located in Libo Mill (2 MW) and Rama-rama Mill (1.8 MW) in Riau. ICED II provided technical assistance for the development of pre-feasibility study for the biogas power plant projects. Projects that Leveraged Funds due to ICED Assistance. ICED II provided a variety of technical assistance to renewable energy project developers. The five projects below enjoyed technical assistance such as survey visits, identification of project design gaps and risks, and project rehabilitation. Following the technical assistance, three projects were able to leverage funds by receiving $6.86 million of committed grants from MCA-Indonesia2.

Table 2. Projects that Leveraged Funds (January-March 2017) [REDACTED]

Financial Close of Supreme Energy Muara Laboh Geothermal Project. PT Supreme Energy Muara Laboh (SEML) project reached financing agreement with the Japan Bank for International Cooperation, the Asian Development Bank, and a consortium of commercial banks under a guarantee from Nippon Export and Investment Insurance. Financing is intended to cover Phase I (80 MW) of the 220 MW project power purchase agreement (PPA) signed with PLN earlier this year. ICED II and USAID Sector Reform and Utility Commercialization (SRUC) project performed technical due diligence for PLN on SEML application for (power purchase) price negotiations.

2 Millennium Challenge Account - Indonesia (MCA-Indonesia) is a trustee institution that the Government of Indonesia formed to become the implementer of Compact Program. Compact is a competitive grant ran by the Millennium Challenge Corporation (MCC) of the United States of America. One of MCA-Indonesia projects, the Green Prosperity (GP), has a grant financing facility that provides grant financing to mobilize greater private sector investment and community participation in renewable energy and sustainable land use practices.

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Nias Hybrid Assessment. About 400 villages on Nias Island still has below 50 percent electrification ratio. This accounted for half of the villages in North Sumatra, which electrification ratio is less than 50 percent. PT. Sumberdaya Sewatama has signed an MoU with PLN to develop hybrid power projects in the island. This quarter, ICED II supported PT. Sumberdaya Sewatama in mapping potential location of hybrid power projects on Nias Island. This study acquired data from Village Potential Statistics (Potensi Desa) that Central Bureau of Statistics published in 2014, data of 20 kV electricity lines, and Nias electricity demand. These data were processed into indicative village clusters with high electricity demand using geographic information system (GIS) to select top eight priority clusters. Further study to identify the project viability will include basic design concept, cost estimates, and business structure. Capacity Building Initiatives. This quarter, ICED II conducted two batches of Individual Banks Training on Clean Energy in an effort to remove barriers in accessing financing for renewable energy projects. The first batch focused on Key Aspect in Assessing Mini hydro Power and Solar PV Power. It took place on February 13-14, 2017 in Medan and 25 staff of 12 offices of Bank Sumut participated. The second batch was held on March 6, 8-9, 2017 at Bank BRI Corporate University in Jakarta with the topic of Renewable Energy Business Overview and Risks. The training in Medan engaged Bank Sumut’s staff from its 12 offices, ranging from marketing staff, analysts to head of branch offices. It received positive feedback from Bank Sumut. Mr. Edie Rizliyanto, the President Director of Bank Sumut, appreciated ICED II initiative and hoped that the training will increase his bank staff’s confidence in assessing renewable energy projects. In Medan, the workshop covered subjects from introduction to different renewable energy technology such as solar PV and mini hydro power, power purchase agreement (PPA), and financial aspects of the renewable energy projects such as sustainable financing and clean energy project financing. The trainers from USAID ICED II and Institute for Economic and Social Research – Faculty of Economics and Business University of Indonesia (LPEM FEB UI) were experienced in technology and financing side of renewable energy. By the end of the training, all participants found the training subjects to be beneficial as there were new information for them. The participants also felt that they are better equipped in assessing renewable energy project proposals and in disseminating the knowledge to their colleagues.

Photo courtesy of ICED II.

Staff from 12 offices of Bank Sumut participated in ICED II-supported Individual Banks Training on Clean Energy in Medan, North Sumatra on February 13-14, 2017. The focus of the training was key aspects in assessing mini hydro power and solar PV power.

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The training in Jakarta is part of a collaboration with Bank BRI Corporate University. For three days, account officers and group heads of various Bank BRI offices took part in the training on renewable energy. The objective of the training was to increase awareness on employees, especially those who manage a minimum fund of $4 million, to identify opportunities on renewable energy. All participants agreed that the training has increased their capacity. They also felt that the knowledge obtained through the training gave positive impact to their future work. They also believe that after attending the training they felt more prepared and ready to be more effective in their position. As a result of ICED II’s assistance, regional bank officers of Bank BRI felt that they are better equipped in assessing renewable energy project proposals and in disseminating the knowledge to their colleagues. WS 2.1.3: Provide technical assistance to PLN in establishing improved and standardized business practices for engagement with renewable IPPs This quarter, ICED II reached agreement with PLN to collaborate on several activities: 1) formation of technical working group for conducting Interconnection Guideline Revision, Review Guideline of Interconnection Study Development, and Development of Revision Input of Sulwesi Grid Code; 2) training on guidelines to review mini hydro power feasibility study; 3) preparing guidelines to review feasibility study of biomass, biogas, municipal waste, solar PV power, and hybrid power projects; 4) reviewing feasibility study of hybrid power projects; 5) preparing engineering cost estimation model for hybrid power projects; 6) conducting workshop to update GIS map of PLN’s 20 kV grid in North Sumatra and Aceh, as well as to develop GIS map of PLN’s 20 kV grid for South Sulawesi, West Nusa Tenggara and East Java; and 7) implementing smart grid control pilot project in Kupang and Sumba. Revision of Renewable Energy Generation Plants’ (REGP) Interconnection Guideline and The Development of Review Guideline for REGP’s Interconnection Study. This quarter, ICED II prepared a draft of inputs to revise REGP’s Interconnection Guideline. ICED II synthesized the inputs from various meetings, seminar, workshop, and other events with project developers and key related stakeholders. These inputs will be essential for the technical working group on revision of REGP Interconnection Guideline. The establishment of the group itself is still under discussion between ICED II and PLN. Implementation of Smart Grid Control in Kupang and Sumba Island for improvement of Solar PV project penetration level. Grid interconnection issue or the ability for local PLN power grid to fully absorb power supply that is produced increasingly by variable renewable energy power plants becomes a problem due to various issues, among other the grid capacity and other technical matters. PLN grid in Kupang has not been able to fully absorb power produced by Indonesia’s largest 5 MWp solar PV system in Oelpuah, Kupang, NTT. In order to solve the grid interconnection issue, this quarter, PLN deployed a dual-fueled mobile power plant or vessel plant. Following a series of technical assistance for PLN, in February 2017 ICED II wrote a project memo with proposed solution for the grid interconnection issue in Kupang, NTT. Among ICED II recommendations were to maximize operation of the vessel plant to improve the penetration of Oelpuah Solar PV system by changing the vessel plant’s mode of operation from synchronous to asynchronous. The other

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recommendation was to shift grid control pilot project from Kupang to East Sumba, where similar problems have been encountered. For the next five years, at minimum, the vessel plant will cover the fluctuating power supply production of the Oelpuah Solar PV System in Kupang. However, when the contract with the vessel plant ended, the grid interconnection issue in Kupang will return. East Sumba has a 1 MWp solar PV project in Hamba Praing that also suffered from grid system interconnection problem. Local PLN power grid in Sumba could not fully absorb the power that the solar PV power plant produced. This was due to manual system that local PLN power grid still uses. In March 2017, ICED II suggested PLN to install an automatic dispatch control system to help with the interconnection problem. The control system will cover the intermittency nature of solar PV power plant and improve PLN’s grid load response by automatically absorbing power produced by the 1MWp solar PV power plant. Development of Review Guideline for Hydropower Project Feasibility Studies. In the previous quarter, PLN’s New Renewable Energy and Energy Conservation (EBT) Division approved the Guidelines for Reviewing Hydro Power Feasibility Studies. This quarter, the PLN EBT agreed to collaborate with ICED II to conduct trainings on the approved guidelines in Makassar and Medan. ICED II submitted the revised Indonesian version of the guidelines to PLN as a requirement for PLN to issue a letter of decree from the Corporate Planning Director for their regional offices. In the revised version, the content has been adjusted to the most recent MEMR Regulation No. 12 of 2017. This quarter, ICED II revisited, revised, and planned to repackage a set of tools that have been used in providing technical assistance to project developers. The objectives of this activity are to improve quality of ICED II technical assistance in hydropower project development and facilitate systematic transfer of knowledge to hydropower project developers. Below are the list of tools:

a) Energy estimation; b) Transmission line losses

estimation; c) Direct flow measurement at

project site;

d) Penstock diameter and thickness estimation;

e) Project financial analysis; f) Transient analysis; g) Submergence estimation; h) Head Losses Estimation.

Guidelines for Reviewing Biomass, Biogas, Municipal Solid Waste, Solar PV and Hybrid Power Feasibility Studies. With the completion of Guidelines for Reviewing Hydro Power Feasibility Studies, PLN New and Renewable Energy (EBT) Division expressed the need for similar review guideline for other renewable energy technologies. In response to this, ICED II prepared table of contents of Guidelines for Reviewing Biomass, Biogas, Municipal Solid Waste, Solar PV and Hybrid Power Feasibility Studies. ICED II will incorporate inputs from specialist, experts, and practitioners of various renewable energy technologies to further develop the guideline. Preliminary discussion with PLN RE division related to this activity has been carried out. Training for PLN in Reviewing Feasibility Study of Mini Hydro Power (MHP) Project by using MHP Review Guideline. This training should have taken place earlier. However, due to changes in PLN structure, the training is rescheduled into Quarter 3 period. As the training plans to target staff

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of PLN regional offices, the PLN Headquarter would need to issue a Board of Director Decree prior to inviting the PLN regional staff to take part in the training. Review of Hybrid Power Feasibility Studies. In order to review their project developer proposals, PLN RE Division has shared with ICED II seven solar PV and hybrid power projects feasibility studies. ICED II has reviewed those feasibility studies and produced project memos. In the next quarter, ICED II will present the project memos to PLN EBT Division. Development of “Engineering Cost Estimate” Model for Solar PV and Hybrid Power project. In previous quarters, ICED II facilitated PLN RE Division in developing engineering cost estimation model for solar PV projects. The model facilitated solar PV investment and tariff calculation for projects in Gorontalo (20 MWp), Minahasa (10 MWp), Bima (10 MWp), and Lombok (20 MWp). PLN EBT Division accepted the revised model that ICED II submitted and appreciated ICED II support. Following the successful work, PLN EBT Division would like to obtain similar support for hybrid power project. This quarter, as follow up to the request, ICED II discussed with PLN EBT Division on data requirements for capital expenditures of old and new diesel power plant with various capacities. Updating 20 kV digital spatial data. This quarter, ICED II coordinated with PLN office in North Sumatra and Aceh to update their 20 kV digital spatial data. In addition, ICED II will work with PLN offices in South Sulawesi, West Nusa Tenggara and East Java to develop spatial data for 20 kV distribution line (grid mapping). In order to ensure transfer of knowledge, ICED II developed guidelines for this activity. The guidelines will come through RUED Guidelines. Once the guidelines is done, ICED II will present and roll out the guidelines to PLN Regional Offices. Therefore, the guidelines will become part of PLN Regional Office’s business plan and the updating of the 20 kV map will be part of PLN’s regular activity. In the next quarter, ICED II plans to introduce the guidelines to PLN Regional Office. Provide input to revise Sulawesi Grid Code for interconnecting Large Scale Variable/Intermittent RGEP to the transmission line. This quarter, ICED II developed preliminary study to revise Sulawesi grid code. The study is part of impact studies for solar PV and wind power plant in South Sulawesi. ICED II discussed with PLN Planning System that the need for the revision could be carried out next quarter. Task 2.2. Increased Local Capacity of Science, Technology, Innovation and Human Resources for Clean Energy Growth WS 2.2.1: Conduct initial landscape assessments of GOI agencies, industry associations, and academia to identify capacity building needs to promote S&T advancements in energy planning, modeling, integration, etc.

Landscape Assessment Report. This quarter, ICED II reviewed and reassembled its landscape assessment report, turning it into a full report. The project’s landscape assessment contains required steps for capacity building efforts that ICED II needs to conduct for its counterparts and activities. The training needs for Center for Human Resource Capacity Development

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(PPSDM) and RAD/RAD GRK Secretariat, as ICED II counterparts, were identified. In addition, the training needs for RUEN and RUED as ICED II activities, were also identified. The Landscape Assessment Report is a living internal document for ICED II activity reference. Training Needs Assessment for the Center for Human Resource Capacity Development (PPSDM). This quarter, ICED II developed a training needs assessments as follow up to the landscape assessments. The curriculum for Human Resource Capacity Development Agency of MEMR (BPSDM) and PPSDM that both parties accepted last quarter, it will be later discussed with technical experts and stakeholders. ICED II planned to conduct two focus group discussions (FGDs) and one workshop during the Training Needs Assessment (TNA) for PPSDM. A meeting is scheduled for April 2017 in order to implement these activities. Training Needs Assessment for PLN EBT on Feasibility Study for Mini Hydro Projects. In the previous quarter, ICED II identified the need to conduct a training to roll out the Guidelines for Reviewing Hydro Power Feasibility Studies. As follow up, this quarter ICED II developed a proper TNA to assess capacity building needs for mini hydro power projects and capacity building plans to provide support for PLN. Two trainings were scheduled to take place in Makassar and Medan. However, both had to be rescheduled as they required a decree from PLN’s board of director prior to inviting the PLN regional staff to take part in the training. Institution with Improved Capacity. Following the completion of several final draft of studies for PLN System Planning in the previous quarter, this quarter ICED II added PLN System Planning to the list of institutions with improved capacity. The studies developed last quarter were System Impact Study of Interconnection of 331.2 MW of Wind Power and 175 MW of Solar Photovoltaic (PV) Power Plants to the South Sulawesi Power Grid, White Paper on Wind Power Plants, and System Impact Study Methodology report. These studies were designed to improve PLN’s planning for the solar and wind power plants connected to the transmission system

WS 2.2.2: Work with key relevant national/subnational government entities, PLN and industry associations to identify specific renewable energy and energy conservation technology innovations that will be crucial for rapid deployment of domestic clean energy capacity, and develop road maps and/or pilots for deployment and scaling-up, as well as to assess their individual needs for assistance in strengthening human capacity to support such innovations Topography Mapping of Hydropower Project by using Drone. This quarter, ICED II visited Sapaya 5 MW Mini Hydro Power Plant site in South Sulawesi to observe actual use of drones for toopograpic mapping using a drone. The subcontractor demonstrated the use copter and fixed wing drones to collect data with optic camera and LIDAR (Light Detection and Ranging) sensors. Following the demonstration, the subcontractor submitted a report that compared the topography maps produced using optic camera and LIDAR sensors with the maps that the project developer produced. ICED II and the subcontractor presented draft of the final report on drone topographic mapping to USAID Indonesia. Another presentation to USAID Indonesia on drone application in energy and other sectors will follow. A comparison of the two different methods showed that topographic mapping using drones is more effective and efficient as it took less time and less people, although the drones cost more

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than conventional theodolite stations. With regards to map accuracy, the subcontractor needed to further review this matter to ensure that drones would actually produce highly accurate topographic mapping. As concerns use of different sensors, LIDAR sensor could map ground contour despite existing canopy, while optic camera could only capture canopy surface. In the following quarter, the subcontractor will need to hand over one unit of assembled vertical take-off landing (VTOL) drone equipped with an RGB camera for topographic mapping purpose. Simultaneously, the subcontractor will also complete their final report on the drone test flights. Energy Efficient Street lighting. This quarter, ICED II decided to postpone all of its activities on retrofitting street lights with energy efficient light-emitting diode (LED) lamps due to several reasons. The first activity, in collaboration with The Greater Jakarta Transportation Agency, was postponed due to regular shift of personnel within government agencies. The second activity, in collaboration with DKI Jakarta Municipality, was also postponed due to governor election process. The Jakarta Municipality Office preferred to wait until the election process is concluded. DKI Jakarta is expected to have a new governor by October 2017. As concern Batam, this quarter ICED II has finalized scope of work to retrofit 12,000 street light lamps with new LED lamps. The Batam Public Works Office provided inputs in terms of the lamps’ specification that has been included in the final scope of work. They already allocated budget to procure the lamps in March-April 2017. However, ICED II has been working with Directorate General of New Renewable Energy and Energy Conservation (Ditjen EBTKE) of MEMR to solve some issues pertaining to the street lighting activity. ICED II decided to postpone the project pending further coordination with Ditjen EBTKE of MEMR. Technical assistance to Directorate of Energy Conservation (DEC) of MEMR on the development of Minimum Energy Performance Standards (MEPS) for LED bulbs. This quarter, ICED II developed detailed activity plan together with DEC of MEMR and they have accepted the plan. At the same time, ICED II has contacted possible contractor to discuss scope of work of the development of MEPS for LED bulbs. In the next quarter, the subcontractor is expected to submit a detailed proposal and discuss the proposal with ICED II and DEC MEMR. ICED II proposed to assist in developing MEPS for LED bulbs and to assist DEC in building their capacity to implement the activity. This work will require establishment of a technical working group/committee for LED MEPS prior to rolling out the plan. Among the activities listed in the scope of works were preparing framework document, reference, testing protocol and standards for LED MEPS and conducting market assessment of LED lighting in Indonesia. Technical assistance for MEMR DEC on Financing of Investment Grade Audit (IGA). This quarter, ICED II developed detailed activity plan together with DEC MEMR and they have accepted the plan. Through this support, ICED II aims at assisting DEC of MEMR in implementing qualified IGA by obtaining financing from either banks, financial institution, or ESCO and building the capacity of DEC to implement this activity.

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Among the activities listed in the scope of works were developing attractive project document and presentation for host, financiers (lenders) or investors for the implementation of selected qualified IGA, identifying and assessing possible financing mechanism, identifying host/financiers (lenders or investors) for the implementation of selected IGA, and conducting one-to-one matchmaking to selected list of IGA project to selected investors. WS 2.2.3: Conduct an inventory of education/training programs to provide training in specific clean energy technology production and maintenance Clean Energy Financing and Sustainable Finance Training Program. This quarter ICED II disseminated modules developed for Clean Energy Financing and Sustainable Finance Training (formerly known as Environmental Social and Risk Assessment or ESRA) to BRI Corporate University and Pertamina University. ICED II collaborated with the corporate university to conduct individual training for banks (see WS. 2.1.2). Bank BRI established BRI Corporate University at the end of 2015 as part of their commitment in developing their human resources. The corporate university focused on providing capacity building in various clusters e.g. microfinance, whole sales, subsidiary, and so on. The Dean of BRI Corporate University acknowledged opportunities to incorporate the training modules from ICED II into their training clusters. ICED II also shared the training modules to Pertamina University that has the intention to establish a diploma program in clean energy financing. Training Provider Inventory Report. During the course of the project, ICED II identified 53 institutions (13 government institutions, two private companies, 23 nongovernmental organizations/associations, and 15 universities) with programs or activities in renewable energy and energy efficiency capacity building. The number of institutions have doubled since the beginning of the project. ICED II regularly updated the inventory report. It will serve as project reference in identifying a number of strategic partnerships with institutions that works in renewable energy-related trainings based on expertise, experience, and relevance. WS 2.2.4: Provide technical assistance to stakeholders in data verification/analysis by developing their capabilities in GHG mitigation/clean energy data collection and modeling tools in order to increase their capacity for evidence-based decision making No activities reported this period.

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Component 3: Outreach on USAID and USG Inter-Agency Activities in Indonesia’s Energy Sector

Main Accomplishments

• Participated in several meetings with USAID and the Bureau of Communications, Public Communications Services, and Cooperation (Biro Komunikasi, Layanan Informasi Publik dan Kerjasama - Biro KLIK) of MEMR (USAID Technical Cooperation counterpart for the GOI-USAID Clean Energy Program) regarding providing monthly updates on the status of activities. We also made two technical presentations during the quarter for the representatives of the Technical Team on ICED II support for solar PV and ICED II solar PV engineering cost estimation model prepared for PLN.

• Helped to organize and conduct the United States Clean Energy Executive Exchange to California, USA, on March 25 – April 1, 2017. ICED II and USAID accompanied a delegation from PLN (10 persons), MEMR (3 persons) and Bappenas (1 person). The program was organized by the United States Energy Associaton (USEA) who provided the funding for the PLN delegation (see WS 3.8 for more information).

Task 3.1: Assist an Annual Coordination Forum of USG Agencies Engaged in Indonesia’s Climate Change Mitigation and Clean Energy Activities No activity this quarter. In discussions with USAID, we have proposed to organize the USG interagency coordination forum in September-October 2017 (Quarter 4 of Fiscal Year 2017). The proposed concept is to showcase good cases/themes that would be of interest to agencies/institutions with similar interests. Task 3.2: Develop a System to Document, Track and Monitor the Progress of Projects Assisted Under Previous USAID Clean Energy Programs and the ICED II Pipeline ICED II met with Layanan Informasi dan Investasi (Lintas) of EBTKE to integrate ICED II Database into their own to boost renewable energy investment in Indonesia. Lintas EBTKE serves as a clearinghouse under Secretary of Directorate General for EBTKE. For more details, please see WS 2.1.1 and WS 3.5 Task 3.3: Manage, Improve and Expand the Clean Energy Website Developed by the ICED Project This quarter, the website received a total of 4,835 page views with 1,595 unique users. The decrease of page views was due to less article posted onto the website.3 This quarter, ICED II revitalized its Facebook page to boost its public outreach activities through use of social media. Despite the minimum reach, ICED II looked forward to get more shares and increase traffic to

3 ICED II relays articles from its monthly highlights to the website. In this quarter, the monthly highlights are still awaiting approval from USAID Indonesia.

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its Facebook page. However, website viewers from Indonesia increased and reached 67 percent this quarter, following the release of Facebook page, to 1,431 users. This quarter, ICED II published several articles on the website i.e. “Electricity mapping paints darkness with colors”, “Indonesia’s National Energy Plan Signed”, and “Drones for Accurate Topography Mapping”.

ICED II Facebook Page <http://www.facebook./icedproject>

Task 3.4: Identify Areas of Collaboration with Other USAID and USG Programs and Develop Joint Initiatives This quarter, ICED II continued collaborating with USAID and other USG projects in the energy sector through the following activities:

• The Supreme Energy Muara Laboh (SEML) geothermal power project, supported by ICED II and USAID Sector Reform and Utility Commercialization (SRUC) project achieved PPA signing and moved towards financial close (see WS 2.1.2 for additional information).

• Attended a meeting with US Foreign Commercial Service (USFCS) Power Working Group on status of RE development and challenges on grid integration.

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• Finalized arrangements and jointly conducted, with USEA, the United States Clean Energy Executive Exchange to California, USA from March 25 to April 1, 2017. The Indonesia delegation included PLN (10 persons), MEMR (3 persons) and Bappenas (1 person). See WS 3.8 for more information.

• Two of ICED II staff completed and received certificate from Financial Management Training on February 1-2, 2017 organized by The Office of Acquisition & Assistance (OAA) and the Office of Financial Managemen (OFC) of USAID Indonesia. The training purpose is to provide updates on standard provisions, financial reporting requirements, cost principles and procurement regulations.

• Presented the results of its activity related to using Unmanned Aerial Vehicle (drone) for hydropower mapping to USAID Environment Office to explore other possible uses of drone technology and data collection/processing for other sectors (e.g., forestry).

Task 3.5: Identify Areas of Collaboration with Other Donors/International Finance Institutions and Develop Joint Activities This quarter ICED II participated in a number of donor or international organization activities that align with the ICED II work program. These included:

• Conducted sustainable finance partners coordination meeting which resulted in partners' program mapping for 2017. Representative from GIZ, IFC, LPEM-FEB UI, and United Kingdom Climate Change Unit (UKCCU) attended the meeting.

• Facilitated USAID and DFAT meeting with OJK focus discussion on plan implementation for DCA Credit guarantee.

• Provided input to USAID Indonesia presentation of options for use of Australia’s Department of Foreign Affairs and Trade (DFAT) through Development Credit Authority (DCA) and/or ICED II.

• Hosted a meeting with IFC on grid connected and off-grid renewable energy lending. They are committing up to US$200 million for renewable energy projects and discussed possible areas of cooperation. Met with Technischer Überwachungsverein (TÜV) Nord, a German a technical service provider, funded by Denmark’s development cooperation (Danida), related to integrating ICED II Clean Energy project database into the EBTKE Lintas (see WS 2.1.1 and 3.2 for more information) .

Task 3.6: Support USAID and GOI Clean Energy Working Group Established under the CDCS ICED II management and USAID had several meetings this quarter with Biro Klik of MEMR (USAID Technical Cooperation counterpart for the GOI-USAID Clean Energy Program) regarding providing monthly updates on the status of activities. Discussions also related to processing tax exemption (for VAT) and plans for preparing BAST related to the transfer of ICED II services (work products) to government counterparts. We also developed two technical presentations during the quarter to representatives of the Technical Team on ICED II support for solar PV) and ICED II solar PV engineering cost estimation model prepared for PLN.

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34 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

Task 3.7: Annual Renewable Energy Power Update (additional activity) No activity this quarter. Task 3.8: Other ICED II Outreach Activity The United States Clean Energy Executive Exchange to California. This quarter, from March 25 to April 1, 2017, 14 Indonesian delegates of senior level officials from PLN (10 individuals), MEMR (3 individuals), and Bappenas (1 individual) took part in the United States Clean Energy Executive Exchange to California, USA. During the one-week program, the delegates visited Sacramento and San Francisco in California and met with key institutions, such as California Energy Commission, California Public Utility Commission, Pacific Gas and Electric Company (PG&E), California Independent System Operator (CAISO), and Sacramento Municipal Utility District (SMUD). The delegates also visited a solar PV power plant and a wind farm to obtain first-hand information and discuss how California’s energy institutions defined their roles and responsibilities in implementing energy policies and worked together to achieve ambitious targets for the contribution of renewable energy in meeting electricity demand. The delegates also visited the11 MW Solar Array at Rancho Seco and 300 MW Solano Wind Farm at Rio Vista to obtain first-hand information on the operation and how they are managed by the State of California. ICED II also commissioned a video production of the California visit. Success Stories. During the quarter, ICED II prepared two Success Stories (see Section 6):

• PLN and Government of Indonesia witness California clean energy leadership • Electricity mapping paints darkness with colors

Table 3. ICED II Participation in Local and International Events Quarter 2, January-March, 2017

No. Event Date Location ICED II Participation

Organizer

1 RUED Technical Guideline FGD

January 26 – 28

Bogor 3 days P2RUED Team, ICED, DEN,

Photo courtesy of: ICED II

11 MW Rancho Seco solar PV plant with decommissioned nuclear power plant in the

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35 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

Table 3. ICED II Participation in Local and International Events Quarter 2, January-March, 2017

No. Event Date Location ICED II Participation

Organizer

PPSDM & MEMR

2 Energy Management Action Network Workshop

February 3 Jakarta Participant Directorate of Energy Conservation, MEMR

3 Training RUED Facilitator February 6-17

Ciracas Trainer P2RUED Team, PPSDM, DEN

4 Gas and Renewable Energy

February 9 Jakarta Participant Pertamina, IndoGAS

5 Biomass and Residue to Power (Travelling Conference)

February 10 Surabaya Speaker Fraunhofer Umsich and ITS

6 Policy and Testing Workshop on EE air conditioner

February 14 Jakarta Participant NC

7 Indonesia’s New Power Regulation Seminar,Permen ESDM 10,11,12-2017

February 21 Jakarta Participant Baker & McKenzie

8 US Power Working Group - briefing on new rural electrification regulation

February 22 Jakarta Participant US Power Working Group

9 Green Bonds Roundtable February 22 Jakarta Participant Kehati 10 Training RUED Fasilitator,

Batch 2 February 27-March 3

Jakarta Participant Bappenas

11 USAID/Indonesia Financial Management and Procurement Workshops

March 1-2 Jakarta Participant USAID Indonesia

12 Rural Electrification Policy Meeting

March 1-3 Bali Participant MEMR

13 Training BRI corporate Universities

March 3 Jakarta Speakers/ Facilitators

BRI Corporate University

14 FGD on RUED Kick Off Preparation

March 3-4 Bogor Participant P2RUED Team, ICED, DEN, PPSDM & MEMR

15 Training BRI corporate Universities

March 6 Jakarta Speakers/ Facilitators

BRI Corporate University

16 Training BRI corporate Universities

March 8 Jakarta Speakers/ Facilitators

BRI Corporate University

17 Training BRI corporate Universities

March 9 Jakarta Speakers/ Facilitators

BRI Corporate University

18 Biogas & Waste To Energy March 15 Jakarta Participant ICESN

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36 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

Table 3. ICED II Participation in Local and International Events Quarter 2, January-March, 2017

No. Event Date Location ICED II Participation

Organizer

Indonesia Forum 2017 19 FGD Project Finance for

medium scale projects March 17 Jakarta Participant GIZ INFIS & OJK

20 Accelerate the Indonesia’s Infrastructure Development

March 22 Jakarta Participant PT. SMI

Clean Energy Technology and Innovation Fund (CETIF)

In this quarter, ICED II implemented several activities using funding from CETIF.

[REDACTED]

Gender Action Program

Gender Self Efficacy Survey. This quarter, the survey took place in three trainings that ICED II held i.e. Training for Individual Banks on Renewable Energy Business Overview and Risks (Batch 1and 2) and RUED National Kick off Training Workshop. All female participants (100 percent) of the individual banks training and the RUED workshop felt that the training increased their capacity and they also felt that the knowledge in the trainings has given positive impact to their works. They also believed that after attending the training, they felt more prepared and ready to be more effective in their position. It can be concluded that the training participants experienced increased capacity to produce actions that are necessary for achieving desired outcomes/attainments.

37 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

3. PERFORMANCE INDICATOR RESULTS AGAINST TARGETS ICED Indicator 1: (GCC Indicator EG. 12-6) Greenhouse gas (GHG) emissions, estimates in metric tons of CO2 equivalent, reduced, sequestered, or avoided through clean energy as supported by USG assistance. Units: Metric tons of CO2e reduced or avoided Performance Indicator Values

Results Data FY 2015 FY 2016 FY 2017 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target (Annual basis as of PMP)

40,000

250,000

- - 264,000

554,000

4,500,000

Actual

Project related results

[REDACTED] Subtotal

37,245.21 135,249.76

110,092.67

137,831.85

248,175.43

420,670

Programmatic related results [REDACTED] Subtotal

-

3,416,510.4

-

-

-

3,416,510.40 Total Actual

37,245.2

3,551,760.2

110,092.7

137,831.8 248,175.4

3,837,180.8

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38 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 2: (GCC Indicator EG. 12-4) Amount of investment mobilized (in USD) for clean energy as supported by USG assistance

Unit: USD

Performance Indicator Values

Result Data FY 2015 FY 2016 FY 2017 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target -

175,800,000

-

-

261,900,000

437,700,000

800,000,000

Actual Public domestic [REDACTED]

Subtotal

-

921,087

-

-

-

921,087 Public International [REDACTED]

Subtotal

-

120,000,000

-

-

-

120,000,000 Private domestic [REDACTED]

Subtotal

-

246,977,981

-

-

-

246,977,981 Private international [REDACTED]

Subtotal

-

30,000,000

-

446,860,000

446,860,000

476,860,000

Total Actual

-

397,899,068

-

226,860,000

226,860,000

624,759,068 * Using USD to IDR currency 1 USD = 13.000

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39 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 3: (GCC Indicator EG. 7.1-1) Number of beneficiaries with improved energy services due to USG assistance Unit: Number of people

Performance Indicator Values

Result Data FY 2015 FY 2016 FY 2017 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target

100,000

300,000

-

-

710,000

1,110,000

5,000,000

Actual Clean energy female [REDACTED]

Total

9,548

102,739

116,892

34,453

151,345

263,632 Clean energy male [REDACTED]

Total

9,300

102,766

117,130

35,724

152,855

264,921 Non-Clean energy female

NA

-

-

-

-

-

- Non-Clean energy male

NA

-

-

-

-

-

-

Total Actual

18,848

205,505

234,022

70,177

304,200

528,553

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40 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 4: (GCC Indicator EG. 12-2) Number of institutions with improved capacity to address clean energy issues as supported by USG assistance Unit: Number of Institution

Performance Indicator Values

Results Data FY 2015 FY 2016 FY 2017 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target -

-

-

-

5

5

20

Actual National governmental [REDACTED]

Total

3

1

4 Sub-national governmental

NA -

-

-

-

Other

NA -

-

-

-

Total Actual -

-

3

1

4

4

QUARTERLY PROGRESS REPORT 2 JANUARY–MARCH 2017

41 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 5: (GCC Indicator EG. 12-3) Number of laws, policies, regulations, or standards addressing clean energy formally proposed, adopted, or implemented as supported by USG assistance

Unit: Number of laws, policies, strategies, plan, or regulations

Performance Indicator Values

Results Data FY 2015 FY 2016 FY 2017 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target

-

4

-

6

10

20

Actual National proposed [REDACTED]

Subtotal

-

-

2

3

5

- National adopted [REDACTED]

Subtotal

-

1

-

2

2

- National implemented [REDACTED]

Subtotal

-

2

-

1

1

- Sub-National proposed [REDACTED]

Subtotal

-

-

4

4

- Sub-National adopted [REDACTED]

Subtotal

-

-

4

4

- Sub-National implemented

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42 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

[REDACTED]

Subtotal

-

1

-

-

-

- Regional or international proposed

NA

-

-

-

- Regional or international adopted

NA

-

-

-

- Regional or international implemented

Total Actual

-

4

2

14

16

20 Note: (*) Our support was recognized and took form as an appendix of “Presidential Regulation No. 22 year 2017 on National Energy Planning”?

QUARTERLY PROGRESS REPORT 2 JANUARY–MARCH 2017

43 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 6: Clean energy generation capacity installed or rehabilitated as a result of USG assistance

Unit: Megawatt (MW) Performance Indicator Values

Results Data FY 2015 FY 2016 FY 2017 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target 3

98

-

-

206

307

400

Actual Project related result Solar [REDACTED] Total

-

-

-

1.0

1.0

1.0 Wind

NA

-

-

-

-

-

- Hydro [REDACTED]

Total

-

20.40

30.90

0.60

31.50

Geothermal NA

-

-

-

-

-

- Biomass and Biofuels [REDACTED]

Subtotal

2.05

-

-

3.80

3.80

5.85 Others

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44 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

NA -

-

-

-

-

-

Subtotal

2.05

20.40

30.90

5.40

36.30

58.75 Programmatic related result Solar NA

-

-

-

-

- Wind

NA

-

-

-

-

- Hydro

NA

-

-

-

-

- Geothermal NA

-

-

-

-

- Biomass and Biofuels NA

-

-

-

-

- Others NA

-

-

-

-

-

Subtotal

-

-

-

-

-

Grand Total

2.05

20.40

30.90

5.40

36.30

58.75

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45 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 7: Proportion of females who report increased self-efficacy at the conclusion of USG supported training/programming

Unit: Percentage of female (%)

Performance Indicator Values

Results Data FY 2015 FY 2016 FY 2016 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target 70% 70% 70% 70% 70% 70% Actual [REDACTED] NA

Total Actual

- 50%

- 100% 100% 88%

-

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46 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 8: (GCC Indicator EG. 12-5) Clean energy generation capacity supported by USG assistance that has achieved financial closure

Unit: Megawatts (MW)

Performance Indicator Values

Results Data FY 2015 FY 2016 FY 2016 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target

8

131

-

-

59.0

66.5

400

Actual Project related result Solar [REDACTED]

Subtotal

-

1.0

-

-

- Wind [REDACTED] Subtotal

-

75.0

-

-

- Hydro [REDACTED]

Subtotal

-

100.0

-

-

- Geothermal [REDACTED] Subtotal 40.0 40.0 40.0 Biomass and Biofuels NA

-

-

-

-

- Others NA

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47 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

- - - - -

Subtotal

-

176.0

- 40

40

216.0 Programmatic related result Solar NA

-

-

-

-

- Wind

NA

-

-

-

-

- Hydro

NA

-

-

-

-

- Geothermal NA

-

-

-

-

- Biomass and Biofuels NA

-

-

-

-

- Others NA

-

-

-

-

-

Subtotal

-

-

-

-

Grand Total Actual

-

176.00

- 40.0

40.0

216.0

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48 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 9: (GCC Indicator EG. 12-7)

Projected greenhouse gas (GHG) emissions reduced or avoided through 2030 from adopted laws, policies, regulations, or technologies related to clean energy as supported by USG assistance

Units: Million of metric tons of CO2e reduced or avoid

Performance Indicator Values

Results Data FY 2015 FY 2016 FY 2016 Project To Date

(Accumulative) Project Lifetime Q1 Q2 Total

Target

80,000

900,000

-

-

3,540,000

4,520,000

27,000,000

Actual Project related result Year of adoption through 2020 [REDACTED] Total current - 2020

446,933.7

392,315.3

579,610.9

121,563.0

701,174

1,540,422.8 2021 through 2025 [REDACTED] Total 2021 - 2025

446,947.0

418,867.6

720,429.6

124,763.9

830,139.0

1,711,008.0 2025 through 2030 [REDACTED]

Total 2026 - 2030

446,947.0

418,867.6

720,429.6

124,763.9

830,139.0

1,711,008.0

Subtotal project result

1,340,827.7

1,230,050.4

2,020,470.2

371,090.7

2,361,451.9

4,962,438.9 Programmatic related result Year of adoption through 2020 Energy sector of RAD GRK

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49 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

- 278,241.00 - -

Energy sector of RAN GRK

-

9,971,290.20

-

-

Total current - 2020

-

10,249,531.20

-

-

- 10,249,531.2

2021 through 2025

Energy sector of RAD GRK

-

231,867.50

-

-

Energy sector of RAN GRK

-

8,309,408.50

-

-

Total 2021 - 2025

-

8,541,276.00

-

-

-

8,541,276.0 2026 through 2030

Energy sector of RAD GRK

-

231,867.50

-

-

Energy sector of RAN GRK

-

8,309,408.50

-

-

Total 2026 - 2030

-

8,541,276.00

-

-

-

8,541,276.0 Subtotal programmatic result

-

27,332,083.20

-

-

-

27,332,083.2

Grand Total Actual

1,340,827.7

28,562,133.6

2,020,470.2

371,090.7

2,361,451.9

32,264,413.1 Note: * – From ICED I. ICED II is contractually required to monitor the results of ICED I supported projects. To be included in this table, a project must have installed capacity that is operating, and thus is reducing emissions. For programmatic related results are taken once a policy/program is adopted or implemented.

QUARTERLY PROGRESS REPORT 2 JANUARY–MARCH 2017

50 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 10: (GCC Indicator EG. 12-1) Number of people trained in clean energy supported by USG assistance

Unit: Number of people

Performance Indicator Values

Results Data FY 2015 FY 2016

FY 2017 FY 2017 (Accumulative)

Project TD (Accumulative) Project Lifetime

Q1 Q2 Total Total

5,000

Male Female Male Female Male Female Male Female Male Female Male Female

Target 300 1,500 -

-

-

-

-

-

-

Actual [REDACTED]

Total Actual 230 66

941

325

163

72

184

40

347

112

1,518

503

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51 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

ICED Indicator 11: Expected lifetime energy savings from energy efficiency or energy conservation, as a result of USG assistance

Unit: Gigajoules (GJ)

Performance Indicator Values

Result data FY 2015 FY 2016 FY 2016 Project To Date

(Accumulative) Project Lifetime Q1 Total

Target

56,000

168,000

-

440,000

664,000

2,800,000

Actual Project related result [REDACTED]

Subtotal

702,019

50,611

- Programmatic related result

Subtotal

-

-

-

Total Actual

702,019

50,611

-

-

752,629 To be included in this table, a project must have installed capacity that is operating, and thus is reducing emissions

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52 INDONESIA CLEAN ENERGY DEVELOPMENT II www.iced.or.id

4. PLANS FOR NEXT QUARTER Component 1: Improve the Enabling Environment for Rapid Co-Investment in Clean Energy

Task 1.1: Increase Capacity for Low Emissions Energy Sector Planning and Implementation

Work Stream 1.1.1: Support Bappenas in RAN/RAD GRK implementation

• Provide support to Bappenas on: 1) monitoring, evaluation and reporting on the 2017 Assistance and Evaluation of 24 provinces event; and 2) preparing reports on the progress of reviews, capacity building, and revisions of RAN/RAD-GRK for energy.

• Provide support to the Bappenas Secretariat in: 1) encouraging and facilitating provinces during the implementation of their GHG emission reduction plans; 2) encouraging and facilitating provinces in monitoring, evaluating, and reporting on the implementation of their GHG emission reduction plans, and 3) responding to inquiries from provinces for one-on-one mentoring sessions in reviewing the implementation of provincial RAD-GRKs, analyzing the result, and generating reports.

• Provide support to the provincial-level Bappeda in: 1) helping provinces update their RAD-GRKs; 2) revising provincial RAD-GRKs in North Sumatra, Aceh, South Sulawesi, NTB and East Java; and 3) helping the provinces in monitoring, evaluating, and reporting on the implementation of their GHG emission reduction plans.

Work Stream 1.1.2: Support sub-national governments in RAD-GRK and RUED/RUKD

• ICED II will initiate an active engagement with the governments of focus provinces, in addition to North Sumatra. ICED II will take advantage of its presence in the national process on RUED development to support the focus provinces in preparing or updating or aligning their RUED.

• Introducerural electrification approach and methodology within the provincial RUED to meet electrification targets.

• Provide capacity building on RUED development to the USAID priority and other selected provinces.

• Conduct consultative meetings with local stakeholder to communicate the Nias Electrification Study results.

• Conduct consultative meetings with local stakeholder to communicate the findings on the assessment of provincial energy planning documents, and explore possible measures to align these energy related plans.

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Work Stream 1.1.3: Assist Bappenas, MEMR and PLN in in electricity generation and demand side management planning in developing RUEN, RUKN and RUPTL

• Provide technical assistance to the Joint Secretariat of Energy Planning on RUEN implementation.

• Work with Bappenas’ Directorate of Energy, Mineral Resources and Mining, MEMR and National Energy Council to develop RUED training modules.

• Support and facilitate the establishment of a joint secretariat to manage the nation-wide process of RUED development.

Task 1.2: Policy and Regulatory Reform Support for Clean Energy Project Development Work Stream 1.2.1: Support to new financing sources and products

• Work with USAID/Indonesia to solicit interest in establishing a DCA facility in one or more Indonesian banks or financial institutions.

• Work with OJK on possible replication/scaling up of the DCA program. • Work with the International Finance Corporation to initiate green bonds in

Indonesia for clean energy projects. • Support the GOI in developing an alternative financing mechanism outside the

credit guarantee (i.e., green bonds and public finance (energy fund)). • Support OJK’s Non-Bank Financial Institutions (NBFI) Department and Nikko

Securities in implementing the Clean Energy Mutual Fund. Work Stream 1.2.2: Support new/improved regulatory framework for renewable energy power regulations generating facilities

• Conduct a study on Clean Energy Research and Development Institutional Mapping in Indonesia.

• Offer support to DG NREEC and DG Electricity on implementation of MEMR Regulation 12 of 2017.

• Support MEMR on the business model for mini-grids in non-PLN service areas.

Work Stream 1.2.3 - Support PLN on implementation of renewable energy IPP regulations

• Support PLN in the implementation of MEMR Regulation No. 12 of 2017. • Provide inputs to draft renewable energy PPAs.

Work Stream 1.2.4 - Support OJK’s Sustainable Finance Program

• Continue supporting OJK to implement the Indonesia Sustainable Finance Roadmap 2013-2019.

• Revise the ICED I study, “Powering Green Growth.” • Support the development of OJK Regulation (Peraturan OJK). • Conduct baseline study on green lending balances as of 2015.

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• Develop a system for sustainable finance monitoring and reporting. • Support OJK.s participation in relevant international events and conferences.

Work Stream 1.2.5 – Assist subnational governments to implement and communicate energy policies/regulations

• Hold consultative meetings with Bappenas and MEMR on data and guidance for energy planning at the subnational level.

• Initiate discussions in South Sulawesi, Aceh, East Java and NTB regarding RUED. • Hold consultative meetings with local stakeholders on the alignment of

provincial energy plans and policy scenarios in RUED.

Component 2: Accelerate the Mobilization of Private and Public Sector Co-Investment in Clean Energy

Task 2.1: Advanced Project Development and Investment Promotion

WS 2.1.1: Improve and maintain a database of viable clean energy projects (pipeline) with respective emission reduction contributions

• Update ICED II clean Energy Project Database • Discuss with PLN and MEMR a shared-access database or a parallel database

that can be used to input and monitor the status of renewable energy projects. • Assist PLN and MEMR developing a template for the parallel clean energy

project database. • Train PLN and MEMR on entering data into the Clean Energy Project Database.

WS 2.1.2: Provide advisory services, technical assistance and capacity building to project developers/sponsors, banks and financial institutions, and equipment suppliers and service providers

• Review hydropower project documents and prepare project memos and project advisory reports.

• Review and assist waste-to-energy/landfill gas projects and prepare project memos and project advisory reports.

• Review and assist solar PV projects and prepare project memos and project advisory reports.

• Review and assist biomass power projects and prepare project memos and project advisory reports.

• Review and assist biogas power projects and prepare project memos and project advisory reports.

• Review and assist hybrid power projects and prepare project memos and project advisory reports for PLN or other stakeholders

• Develop tools for the design analysis of Renewable Energy Generation Plant system.

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• Provide support for DEC-MEMR in the implementation of financing of selected and qualified Investement Grade Audit (IGA).

• Provide support for DEC-MEMR in the development of MEPS (Minimum Energy Performance Standard) for LED Bulb.

• Conduct “in-house” training for selected ICED II partner banks/financial institutions.

WS 2.1.3: Provide technical assistance to PLN in establishing improved and standardized business practices for engagement with renewable IPPs.

• Revise the REGP’s Interconnection Guideline and The Development of Review Guideline for REGP’s Interconnection Study.

• Implement the Smart Grid Control in Sumba Island for improvement of Solar PV project penetration level.

• Held a Training for PLN in Reviewing Feasibility Study of Mini Hydro Power (MHP) Project by using MHP Review Guideline.

• Develop the Review Guideline for Biomass, Biogas, Municipal Solid Waste, Solar PV and Hybrid Power Feasibility Studies.

• Review of Solar PV and Hybrid Power Feasibility Studies. • Develop the “Engineering Cost Estimate” Model for Hybrid Power project. • Conduct workshop and update its 20 kV digital spatial data for Sumatera Utara

region and Aceh and the development of digital spatial data for 20 kV distribution line for South Sulawesi, West Nusa Tenggara and East Java provinces.

• Provide input to revise Sulawesi Grid Code for interconnecting Large Scale Variable/Intermittent RGEP to the transmission line.

Task 2.2: Increased Local Capacity of Science, Technology, Innovation and Human Resources for Clean Energy Growth

WS 2.2.1: Conduct initial landscape assessments of GOI agencies, industry associations, and academia to identify capacity building needs to promote Science and Technology advancements in energy planning, modeling, integration, etc.

• Revisit and refine the landscape assessment of the RAN/RAD-GRK Program. • Conduct landscape assessment of the RUEN/RUED Program. • Link the assessment with the institutions targeted for institutional capacity

building. Work Stream 2.2.2: Identify renewable energy and energy efficiency technology innovations and promote widespread utilization

• Compile information on promising technology applications of renewable energy resources, conversion technologies, and other related systems.

• Examine the result of the use of UAV (drone) for topography mapping of hydropower sites.

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• Prepare a plan for replicating Rural Electrification in Nias to other areas in North Sumatra and ultimately in provincial RUED.

WS 2.2.3: Conduct an inventory of education/training programs to provide training in specific clean energy technology production and maintenance

• Prepare off-grid solar PV training modules for BPSDM (Human Resource Capacity Development Agency of MEMR).

• Analyze the management and technical training programs of PLN’s training and education institutions and develop a plan for institutionalize ICED II training for PLN.

• Identify education partners for RUED, electrification, and renewable energy system impacts.

• Make improvements to the new bank training module based on rebranded sustainable finance and clean energy financing.

• Hold two batches of training for OJK on solar PV, mini-hydro and biogas power financing.

• Pilot sustainable financing and clean energy financing training-of-trainers modules, and prepare two batches of training courses.

Work Stream 2.2.4: Support data verification/analysis in GHG mitigation/clean energy modeling

• Assist Bappenas and the provinces in revising their RAD-GRKs. • Pilot the use of HOMER, Network Planner, and LEAP to optimize the role of

renewable energy in PLEA pilots.

Component 3: Outreach on USAID and USG Inter-Agency Activities in Indonesia’s Energy Sector

Work Stream 3.1: Annual coordination forum for USG agencies working in climate change and clean energy

• Attend the Asia Clean Energy Forum in Manila, Philippines in June 2017 to meet with USAID and other USG agencies to explore the plan to organize the USG Coordination Forum under the new U.S. administration.

• Seek guidance from USAID/Indonesia on the Forum’s proposed date. Work Stream 3.3: Manage, improve and expand the USAID clean energy website and other outreach activities

• Develop regular success stories and news articles on project activities. • Develop more robust event calendar with links to related news articles. • Conduct regular maintenance to ensure that the website works properly.

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Work Stream 3.4: Coordinate with other USG and USAID environment programs and develop joint activities

• Work with the U.S. Energy Association, USAID and the participants in the California Utility Executive Exchange (PLN, MEMR, BAPPENAS) to plan the second phase visit of California representatives to Indonesia.

• Seek guidance from USAID/Indonesia on the proposed date for the PLN guidelines for geothermal price renegotiation training workshop.

• Work with USAID Indonesia and USAID DCA office to finalize plan for use of DFAT funds (see WS 3.5).

• Meet with representatives of the USAID RDMA Clean Power Asia to identify possible joint activities and information sharing. Follow up as needed.

Work Stream 3.5: Coordinate with other donors and international finance institutions and develop joint activities

• Continue to coordinate with IFC, WWF, GIZ, and UKCCU on sustainable finance program with OJK.

• Meet with representatives of Global Green Growth Initiative (GGGI) to identify possible joint activities and information sharing. Follow up as needed.

• Meet with representatives of the International Energy Agency and MEMR DG NREEC DEC to identify possible joint activities and information sharing. Follow up as needed.

• Work with USAID and DFAT to scope out ICED II activities that DFAT funding could be used to support. Note these are activities within the existing ICED II scope of work.

Work Stream 3.6: Support USAID-GOI Clean Energy Working Group (Tim Teknis)

• Organize the semi-annual meeting with Tim Teknis on results and achievements, and program review.

• Finalize the progress reporting and BAST reporting requirements. • Conduct additional technical briefings on rural electrification and other topics

Work Stream 3.7: Prepare annual renewable energy power update (additional activity)

• Discuss and propose joint MEMR/PLN/ICED II first annual renewable energy power update.

• Compile data and conduct analysis on the status of grid-connected renewable energy power projects.

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5. PROBLEM RESOLUTION Status of Resolving Problems Described in the Previous Report ICED II reported the following issues during the previous quarter: 1. Request for ICED II analysis of alternative government incentives to the feed-in

tariff. The request has not been clarified because the Minister has issued two new regulations (MEMR Regulation Number49 and 50 of 2017) on renewable energy which resulted the regulation for FITs should be put on hold. The original request came from the Secretary of Directorate General for New Renewable Energy and Energy Conservation.

2. VAT tax exemption. VAT exemption on office rent and service charges for the period April 15-October 14, 2016 has been resolved, in line with USAID procedures and guidelines

3. USAID Limited Financial Review Report. ICED II project has implemented the agreed upon action plan (based on findings from the USAID team based on the Limited Financial Review that has taken place in Q2). The action plan provides assurance that locally incurred expenditures have been accurately reported, recorded, and adequately supported. ICED II also has arranged systematic filing and record on financial aspect and reporting to ensure the adequacy of the internal control system. Finally, ICED II has hired a Finance Officer and clarified the segregation of duties in line with the ICED II Operations and Finance Manuals. The next review of follow up LFR will tentatively be conducted in April 2017 to assess the implementation of ICED II’s action plan.

4. Alignment of ICED II work program with various GOI counterparts. The year 3 work

plan has been revised and adjusted in line with GOI priorities, and documented in the form of Term of Reference which delineate Scope of Works and responsibilities

5. MEMR reversal of renewable energy FIT regulations. ICED II support on renewable energy FIT regulation has been put on hold, due to the issuance of new Minister of MEMR Regulation number 12 of 2017 on Utilization of Renewable Energy for Electricity Supplies for the purchase of electricity by PLN. Following meetings with MEMR and PLN, ICED II will support the implementation of MEMR Regulation 12 of 2017.

New Issues Encountered since the Previous Report The following new issues and challenges were encountered (or not yet reported) this quarter:

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1. MEMR postpone ICED II proposed energy efficient street lighting programs with municipalities. The ICED II Year 3 Annual Work Plan had three areas of activity related to energy efficient street lighting: 1) Prepare prefeasibility study for Energy Efficiency (EE) In Street Lighting for selected municipalities and support procurement; 2) Prepare “lessons learned” study on municipal EE in street lighting projects; and 3) Advisory support for national government promotion of EE in Street Lighting. These were presented to the Tim Teknis at the October 12, 2016 meeting to review the ICED II proposed work plan. Based on the “no objection” received from MEMR and other Tim Teknis member, ICED II embarked on formalizing the work plan for these activities. Included in this were responses to requests for assistance from Batam Municipality and DKE (Jakarta Governorate). Based on the request, ICED II drafted a work plan that would yield retrofits of up to 190,000 streetlights with LED lamps. However, ICED II needs to further aligned the initiative in street lighting with DEC objectives.

2. USAID reference to Bloomberg’s negative review of Indonesia clean energy

investment climate. The 2016 South East Asia renewable market outlook prepared by Bloomberg New Energy Finance found that most of the project pipeline in Indonesia is for geothermal projects. A few projects have been announced in wind and solar but without a supporting policy. The total solar capacity in Indonesia was only 84MW as of 2015. In July 2016, Indonesia announced FiTs for 250MW capacity ranging from $0.145-0.25/kWh for 22 provinces. Official launching of the FiT scheme was scheduled in October 2016 but has been postponed till further notice. The policy target of 5 GW (5,000 MW) of solar PV by 2050 lacked the supporting policy framework to be realized. Furthermore, the PLN additional capacity target of 620 MW by 2020 under 1,000 islands program is facing technical and financing difficulties and projects have been delayed. The Bloomberg report findings were communicated by USAID Washington to USAID Indonesia as an indication that Indonesia did not have a policy and investment climate that was conducive based on the USAID building blocks for scaling up renewable energy.

3. MEMR Approval of VAT Exemption for ICED II subcontract supporting OJK. The process of VAT exemption on green lending assessment implemented by LPEM UI is stalled as, Bureau of Communication and Cooperation - MEMR requires written statements from OJK as ICED II counterpart that declare ICED II activities have been implemented and the counterpart received the intended benefits.

4. ICED II resignation of Finance and Administration Manager. The ICED II Finance and

Administration Manager submitted his resignation in March 2017. This is a critical role in the administration of ICED II financial management, tax reporting, and human resource development4.

4 The ICED II Senior Human Resource Office had previously resigned and the duties and responsibilities were given principally to the Finance and Administration Manager, as well as the Office Manager and Administration Officer.

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5. New MEMR Regulations affecting development of renewable energy. MEMR Regulation No. 12 of 2017 Utilization of Renewable Energy for Electricity Supplies, MEMR Regulation No. 10 of 2017 concerning Principles of the Electricity sales and purchase agreement, and MEMR Regulation No. 38 of 2016 concerning the accelerating electrification in undeveloped rural areas, remote regions, border areas, and small inhabited islands through the implementation of small scale electricity provision enterprises, have fundamentally changed the regulatory framework; institutional arrangement between MEMR and PLN; and procurement, licensing and contracting for renewable energy projects. The initial response from the renewable energy industry and financial institutions is that the new regulations will negatively impact renewable energy project and market development.

Proposed Solutions to Outstanding and New Problems 1. Request for ICED II analysis of alternative government incentives for renewable

energy sector. ICED II should present the results of the work it has done, and scope out a broader, high level, study on applying the “building blocks for scaling up renewable energy.”

2. VAT Tax exemption. ICED II should work with OJK to facilitate an issuance of the statement to the Bureau of Communication and Cooperation - MEMR in response to the letter sent to OJK requesting their statements that assessment of Green Lending activities have been in line with the agreed upon support from ICED II.

6. USAID Limited Financial Review Report. ICED II project has received a request for the USAID follow up to its Limited Financial Review. ICED II is preparing for the review and ensuring all items in the Action Plan are being followed. In addition, Tetra Tech will request international travel approval for its home office Contracts Manager to conduct an internal assessment prior to the USAID visit, and work with ICED II management and key staff to implement any findings.

6. Alignment of ICED II work program with various GOI counterparts. ICED II will continue to meet with key counterparts, specifically MEMR, PLN and BAPPENAS to ensure its Year 3 work plan reflects the priorities and program focus. This will be done through individual “one-on-one” meetings with representative of units in each institution.

7. MEMR removal of ICED II proposed energy efficient street lighting programs with municipalities. ICED II and USAID conducted a series of meetings with MEMR DG NREEC DEC regarding the scope of assistance during year 3. We have removed the activities related to street lighting. We will work closely with DEC in finalizing the scope of work and coordinating the technical assistance. ICED II will revisit the support for street lighting, which ICED II still believes to be an important area of work, in future work plans. In the meantime, we will inform the local government counterparts in Batam and Jakarta that the work has been postponed.

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8. USAID reference to Bloomberg’s negative review of Indonesia clean energy investment climate. ICED II will use the visit to California by PLN, MEMR and BAPPENAS as starting point for elevating our support to the three key institutions as it relates to implementing policies and programs to support the renewable energy targets. ICED II and USAID will communicate the new focus to USAID Washington.

9. ICED II resignation of Finance and Administration Manager. Tetra Tech has already begun the process of recruiting a replacement for the Finance and Administration Manager and should have a candidate proposed to USAID for concurrence be mid-May 2017. We will also revisit the vacant position of the Human Resources Officer in the process.

10. New MEMR Regulations affecting development of renewable energy. ICED II is

conducting meetings with both MEMR and PLN regarding MEMR Regulation No. 12 of 2017 Utilization of Renewable Energy for Electricity Supplies, MEMR Regulation No. 10 of 2017 concerning Principles of the Electricity sales and purchase agreement, and MEMR Regulation No. 38 of 2016 concerning the accelerating electrification in undeveloped rural areas, remote regions, border areas, and small inhabited islands through the implementation of small scale electricity provision enterprises. We anticipate that this will result in changes to the Year 3 Annual Work plan.

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7. SUCCESS STORIES

PLN and Government of Indonesia witness California clean energy leadership Fourteen senior level officials of Government of Indonesia and state electricity company met with their counterparts in California to better understand how to achieve the national renewable energy target of 23% by 2025. From March 26 to March 31, 2017, in collaboration with the U.S. Energy Association (USEA), ICED II supported senior level officials from Ministry of Energy and Mineral Resources (MEMR), National Development Planning Agency (Bappenas), and State Electricity Company (PLN) visit Northern California to learn how the government, utilities and other key organizations have implemented a plan, and supporting the programs to achieve progressive targets of up to 50% renewable energy by 2030. In California, renewable energy generation in the electricity grid (excluding large hydropower) has already reached 27%. The team of 14 gained exposure on latest developments, technologies, and best practices in renewable energy. During the visit, the delegates met with key institutions, such as California Energy Commission, California Public Utility Commission, Pacific Gas and Electric Company (PG&E), California Independent System Operator (CAISO), and Sacramento Municipal Utility District (SMUD). USEA organized visits to Rancho Seco 11 MW Solar PV project and the 300 MW Solano Wind Farm to see utility scale renewable energy projects. In the meetings, they learned how California’s energy institutions implementing energy policies and worked together to achieve ambitious targets for

Photo by ICED II.

Senior officials of Ministry of Energy and Mineral Resources (MEMR), National Development Planning Agency (Bappenas), and State Electricity Company (PLN) visited 11 MW Rancho Seco Solar

Increase of California Solar Generation Capacity (2010 to 2015)

Source: California Energy Commission for size at 1 MW

or larger. California Solar Statistics for Net Metering Solar PV.

The graphic shows nine times increase in California Solar Generation Capacity from 2010 to 2015. At the end of 2016, the total capacity reached 15 100 MW

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the contribution of renewable energy in meeting electricity demand. Electricity mapping paints darkness with colors The map that ICED II developed provides visual for villages with and without access to electricity in North Sumatra Province. A map has many uses, from getting direction and determining boundaries, to presenting information. With a map in hand, someone can easily see a landscape, understand patterns and relationships, and analyze matters. USAID Indonesia through its Clean Energy Development II (ICED II) Project applies geographic information system (GIS) to carry out spatial mapping of villages with limited and zero access to electricity throughout Indonesia, by plotting data from the Central Bureau of Statistic or Badan Pusat Statistik (BPS). This work is part of USAID’s technical assistance to support the preparation of the Indonesia’s Regional Energy Plan (RUED) for all 34 provinces, whose efforts led by the National Energy Council, the National Planning and Development Agency (Bappenas) and the Ministry of Energy and Mineral Resources (MEMR). The maps are also provided to the Directorate General of Electricity of MEMR to support preparation of GOI’s current rural electrification program. The map presents a visual look of villages with and without electricity through the application of diverse colors as representation of different electrification ratios. It is expected that the maps would assist the local governments in planning activities around village electrification.

Map courtesy of ICED II.

The map that ICED II developed provides visual for villages with and without access to electricity in North Sumatra Province. The green color represents that 94 percent of the province has 75 percent to 100 percent access to electricity, while the red color represents zero until 25 percent of access to electricity. These are remote villages with limited road access and located on the mountainous area.

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To further enhance the use of GIS spatial mapping for electrification planning, ICED II has developed a more detail electrification map with overlays with other data such as PLN’s distribution grid, for North Sumatra province, including Nias island. It can serve as reference for the local government in determining priority for electrification programs, analyzing electricity demand, as well as developing their respective Regional Energy Plan. The map of North Sumatera and Nias island illustrates the existing condition of villages with and without access to electricity. North Sumatera province has an electrification ratio of 90 percent, however looking at the figures on village and subdistricts level, 700 villages still have less than 50 percent ratio of electrification. It means only half of the villages has access to electricity, either through the State Electricity Company (PLN) or home generators. More than half of this figure is on Nias Island, where 400 villages are still in the dark in contrast to North Sumatra’s high electrification ratio. These villages are mostly located in areas without road access. ICED II is also developing similar maps – a combination of electrification ratio and existing utility distribution grid - for its other focused provinces, including Aceh, South Sulawesi, West Nusa Tenggara and East Java. As part of its technical assistance for RUED, ICED II plans to hand over these maps of Aceh, North Sumatra, and South Sulawesi at the forthcoming RUED Workshop in May 2017.

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ANNEX A: ICED II TECHNICAL ASSISTANCE This appendix lists the private, bank/financial, and government organizations ICED II has assisted since its inception in May 2015. Number of Projects

Assisted through Private Companies

Number of Projects Assisted through Banks/

Financial Institutions

Number of Projects Assisted through

State-owned Companies

Project Memo

12 4 8 21 [REDACTED]

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ANNEX B: REFERENCE INFORMATION FOR PERFORMANCE INDICATORS AND RESULTS This annex provides details on projects that contributed to ICED II results (Section B.1) and training delivered by ICED II (Section B.2). Even though a project may have been commissioned or begun operating during the first ICED Project, certain results, such as projected GHG emissions reduced or avoided through 2030, can also be attributed to ICED II because their impacts extend to the ICED II project period. Others, such as installed capacity, persons with access to clean energy, and leveraged funding, are attributed to either ICED or ICED II, but not to both projects. Table 1 provides an overview of the projects detailed in Section B.1. They are of two types – renewable energy and energy efficiency – and the results tracked vary somewhat by type. The projects are listed in chronological order by their commissioning or commercial operating date. New projects contributed to ICED II results are highlighted in grey. In the tables that follow, a * indicates that the results were attributed to the first ICED project.

Table B-1. Summary of Projects Contributing to Performance Indicators [REDACTED] B.1 Projects Assisted [REDACTED] B2. Programmatic support [REDACTED] B3. Institution with improved capacity [REDACTED] B4. Laws, policies, plans, strategies, or standard [REDACTED]

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B.5 Training

Table B-5. Training Summary for Fiscal Year 2015-2017

[REDACTED]

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ANNEX C: LIST OF TRAININGS

Table C-1. Detailed Training Activities

No. Date Title of Training Event Related Component/ Work Stream

Training Type

Location Participants Organizer / ICED Support Male Female Total Group

October – December 2016 1 13-14

February, 2017

Key Aspect in Assessing Mini Hydro Power and Solar PV Power (Individual Banks Training - Batch 1)

Component 2, WS 2.1.2

Training Medan 24 1 25 Bank Sumut's Staff

1. ICED II Accommodation and Travel , and Training Feedback Survey

2 28 February 2017

Training of Trainer Electrification Mapping (Basic)

Component 1, WS 1.1.2

Training Ciracas Jakarta

17 2 19 MEMR Staff ICED II local transportation & Resource Persons

3 6, 8-9 March 2017

Training Individual Banks on Renewable Energy Business Overview and Risks (Batch 2)

Component 2, WS 2.1.2

Training Jakarta 52 8 60 Bank BRI staff Resource Persons

4 14 - 15 March 2017

RUED National Kick Off Meeting with 34 Provinces

Component 1, WS 1.1.2

Training and Workshop

Jakarta 88 28 116 34 Provinces Meeting package, accommodation and

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No. Date Title of Training Event Related Component/ Work Stream

Training Type

Location Participants Organizer / ICED Support Male Female Total Group

resource person

5 24 March - 1 April 2017

California Utility Executive Exchange Program (USA)

Component 1,2,3

Training California 12 2 14 MEMR Staff & Bapenas

Ticket, Local Transportation, accommodation and Meals and Incident Expenses (M&IE)

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ANNEX D: GENDER SELF EFFICACY ASSESSMENT [REDACTED]

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ANNEX E: ICED II CLEAN ENERGY PROJECT PIPELINE [REDACTED]