Early-Stage Financing Policy for Industrial Decarbonization

The Ministry of Industry (“ Kemenperin ”) has confirmed that the financing policy for industrial decarbonization through the Industrial Decarbonization and Competitiveness Fund (“ IDCF ”) will only be implemented at the initial initiation stage.

“But it will not last long; it may only apply during the initial stage, for the first few years,” said Apit Pria Nugraha, Head of the Green Industry Center at the Kemenperin, to Hukumonline.

According to Apit, the implementation of the IDCF will be limited to the first few years following the introduction of the mandatory industrial emissions reduction policy, which is set to begin in 2027. Once the specified period ends, the financing mechanism will revert to the normal scheme.

“We are still conducting an assessment of the proposed policy. Full operation is expected to commence in the first year of its implementation,” said Apit.

With regard to the IDCF, he explained that the policy constitutes a blended finance scheme consisting of concessional loans and conventional loans.

The combination of these two financing sources is expected to provide loans with lower interest rates and associated costs. Several financial institutions have already initiated engagement and expressed their commitment to supporting this policy.