[\/et_pb_text][et_pb_text _builder_version=”4.22.1″ _module_preset=”default” text_font=”Poppins||||||||” text_text_color=”#FFFFFF” text_font_size=”16px” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n
This content is no longer being updated.<\/p>\n
[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.19.4″ background_image=”https:\/\/www.marketforces.org.au\/wp-content\/uploads\/2016\/10\/Adaro-Tutupan.jpg” custom_padding=”0px||3px|||” global_colors_info=”{}”][et_pb_row _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.19.4″ _module_preset=”default” header_font=”|800||on|||||” header_text_color=”#FFFFFF” header_font_size=”3em” header_text_shadow_style=”preset1″ global_colors_info=”{}”]<\/p>\n
Foreign finance to Indonesian coal<\/h1>\n
[\/et_pb_text][et_pb_text _builder_version=”4.19.4″ _module_preset=”default” text_text_color=”#FFFFFF” text_font_size=”1.5em” link_font=”|600|||||||” link_text_color=”#FFFFFF” link_text_shadow_style=”preset1″ global_colors_info=”{}”]<\/p>\n
Overview<\/a> [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.19.4″ _module_preset=”default” custom_padding=”0px|||||” global_colors_info=”{}”][et_pb_row module_id=”overview” _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n The finance behind Indonesia\u2019s plans to build up to 31 gigawatts of new coal power capacity is overwhelmingly from foreign sources, most notably China, Japan and Korea. Public institutions such as export credit agencies play a critical role in de-risking coal power projects. They shoulder a significant burden of the credit exposure for new Indonesian coal power stations to the point where such projects would be unlikely to proceed without foreign government-backed\u00a0finance.<\/span><\/p>\n Summary:<\/b><\/p>\n China, Japan and Korea are constraining domestic plans to expand coal power. As a result, export markets for plant manufacturers are becoming increasingly important. Indonesia’s <\/span>coal expansion plans present an opportunity for foreign manufacturers producers, able to mobilise public finance sources to facilitate the export of their technology.<\/span><\/p>\n The result is an expansion of polluting power that benefits a handful of domestic and foreign interests, while putting the health and livelihoods of communities at risk. Constructing these new power stations would also contribute to an anticipated oversupply of power in Indonesia, further undermining their justification.\u00a0<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.19.4″ _module_preset=”default” custom_padding=”0px||0px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_divider _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_2,1_2″ module_id=”research” _builder_version=”4.19.4″ _module_preset=”default” custom_padding=”||0px|||” global_colors_info=”{}”][et_pb_column type=”1_2″ _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n Market Forces studied a total of 22 deals to the coal power sector in Indonesia since 2010, which attracted a total of US$17.1 billion of debt. Of these, Export Credit Agencies (ECAs) and Bilateral Development Banks were integral\u00a0financiers, involved in 91% of the deals and providing 64% of the debt finance.<\/span><\/p>\n <\/i>Specifically, regarding the roles of ECAs, Bilateral Development Banks and commercial banks: <\/span><\/p>\n Indonesia\u2019s share of lending to these deals was exceedingly small, accounting for just $347 million or 2% of overall debt over 2 deals. One of these deals involved Indonesia Eximbank and the other involved Bank Mandiri. <\/span><\/p>\n [\/et_pb_text][\/et_pb_column][et_pb_column type=”1_2″ _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.19.4″ _module_preset=”default” background_color=”rgba(67,50,68,0.1)” custom_margin=”||21px|||” global_colors_info=”{}”]<\/p>\n
\nPublic finance plays a critical role<\/a>
\nForeign interests = foreign finance<\/a>
\nThe motivation for China, Japan and Korea<\/a>
\nExamples<\/a>
\nBanking without a permit: Cirebon 2<\/a>
\nIndonesian pain for foreign gain<\/a>
\nNew coal, not necessary<\/a>
\nmethodology<\/a><\/p>\nThe foreign financial sources behind Indonesia\u2019s unnecessary coal expansion<\/h3>\n
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Public finance plays a critical role<\/h3>\n
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![\"\"](\"https:\/\/www.marketforces.org.au\/wp-content\/uploads\/2023\/10\/Cirebon-300x200-1.png\")
The detachment between interests within Indonesia and foreign financiers was made even more apparent in April 2017,