Heaptalk, Jakarta — The Indonesia Investment Authority (INA) and Norfund, the Norwegian Investment Fund for Developing Countries, have signed an Investment Framework Agreement (IFA) to jointly invest in Indonesia, focusing on renewable energy, financial inclusion, and green infrastructure.
The agreement establishes a framework for cooperation encompassing direct co-investments on a deal-by-deal basis and joint participation in investment funds. Leveraging their strengths, INA and Norfund aim to channel resources, expertise, and networks toward impactful initiatives aligning with Indonesia’s national development objectives.
“Focusing on renewable energy, financial inclusion, and green infrastructure, we aim to create a multiplier effect, attracting foreign investments and driving impactful projects that support the nation’s economic and environmental resilience.” CEO of INA, Ridha WIrakusumah, said.
The partnership primarily aims to boost investments in renewable energy, supporting Indonesia’s efforts to expand its clean energy capacity. INA has already demonstrated its dedication to green energy transformation through its initial strategic investment in PT Pertamina Geothermal Energy Tbk (PGE), Indonesia’s largest geothermal energy producer.
Building on this foundation, INA and Norfund will identify and develop high-impact projects in renewable energy, such as solar, wind, and geothermal energy initiatives, contributing to Indonesia’s long-term energy security and carbon reduction goals.
Financial inclusion forms the second pillar of this collaboration. Investments in this area are designed to enhance access to financial services for underserved populations, particularly in rural and remote areas. By improving financial accessibility, the partnership seeks to empower local communities and drive inclusive economic growth, leveraging Norfund’s expertise in financing small and medium enterprises (SMEs) and microfinance institutions.
The third allocation focuses on green infrastructure, including sustainable urban planning, waste management systems, and energy-efficient transportation. These projects aim to address urbanization challenges while promoting environmentally friendly solutions that align with global climate action goals.
The CEO of Norfund, Tellef Thorleifsson, conveyed that Indonesia is a key market. He said the collaboration allowed the company to combine international capital with local expertise. Together, he aims to develop transformative projects that contribute to Indonesia’s energy transition and foster inclusive economic growth.
Norfund, with a portfolio valued at US$3.6 billion, brings its Climate Mandate to the partnership. Introduced in 2022, this mandate prioritizes renewable energy projects with significant climate impact. By mid-2024, Norfund had committed US$400 million globally under the mandate, including US$66 million in Indonesia, showcasing its active involvement in the region. This collaboration with INA will amplify its efforts by leveraging INA’s local expertise and investment networks.
