Here comes the sun: Australian Development Investments in Indonesia
KINETIK is supporting start-ups in Indonesia such as solar pioneer Hijau meet the growing demand for renewable energy through Australia’s impact investment fund.
On the rooftop of a bustling mall in Indonesia, rows of shimmering solar panels stretch as far as the eye can see. The solar roof, which was installed in 2024 at Lippo Mall in Cikarang, a large industrial city in West Java, has already reduced electricity costs and carbon dioxide emissions.
The solar rooftop at Lippo Mall, Cikarang. Photo: DERZIA
“We are able to reduce 85 tons of CO2 emissions every month,” said Indra Setiawan, the head of sustainability at Lippo Mall Cikarang. “From a business perspective, installing solar PV will reduce our operating costs (and) help the company to perform better both financially and environmentally.”
The Lippo Mall solar roof was installed by Hijau, a pioneer in Indonesia’s emerging solar market. The Australian Government is supporting small and medium enterprises across the region – including Hijau – meet the growing demand for renewable energy through its impact investment fund, Australian Development Investments (ADI).
Hijau are pioneers in the solar sector in Indonesia.
ADI uses a fund-of-funds approach. It makes early-stage and concessional investments into promising impact investment funds in the lndo-Pacific. These funds then provide financing to small and medium enterprises (SMEs) – such as Hijau – which meet climate and gender equality criteria. ADI has already unlocked capital for more than 30 businesses in Indonesia, Bangladesh, the Philippines and Vietnam.
In 2024, Australia invested in Singapore-based fund manager Clime Capital’s South East Asia Clean Energy Fund II (SEACEF II), as part of an ADI pilot called Emerging Markets Impact Investment Fund. SEACEF II then invested in Hijau, positioning the company to secure follow-on debt financing for long-term growth.
Clime Capital’s Indonesia Country Manager John Colombo.
Clime Capital’s Indonesia Country Manager John Colombo said Hijau had extensive experience in the solar sector and was dedicated to driving the energy transition in Indonesia. “But beyond their track record and their competence we also encountered a team that shared our values around creating an inclusive workplace,” Mr Colombo said.
Hijau’s asset and compliance manager, Erlin Sangettiyaning Putri, said the firm had a supportive work culture that prioritised employee well-being, with reasonable work hours and family-friendly conditions. When her mother was sick and Ms Putri was seven months pregnant, she said she was able to work from home until she gave birth and then take six months’ maternity leave.
Hijau’s asset and compliance manager, Erlin Sangettiyaning Putri, says Hijau is a family-friendly workplace.
“This support demonstrates how Hijau highly values employees, both as professionals and individuals with family responsibilities,” Ms Putri said.
Hijau has now installed solar roofs for commercial and industrial clients across Java, including Cikarang, Batu and Kramat Jati Lippo shopping malls and Polimetal, a factory in West Java which makes automotive and electric vehicle parts.
Hijau President Director Victor Samuel said Clime Capital’s investment enabled the company to expand its project pipeline. The company also received technical assistance from ADI to strengthen its environmental sustainability, social responsibility and corporate governance.
Hijau President Director Victor Samuel said Clime Capital’s investment enabled the company to expand its project pipeline.
The Emerging Markets Impact Investment Fund pilot, which was established in 2020, positioned Australia at the forefront of innovative development finance.
In 2024 ADI announced it would invest an extra $50 million to support SMEs in Indonesia through KINETIK, the Australia-Indonesia Partnership for Climate, Renewable Energy and Infrastructure.
In February KINETIK announced the first investment: a US$8 million anchor commitment to Indonesian venture capital firm AC Ventures’ Climate Strategy. AC Ventures’ Climate Strategy will invest in sectors such as renewable energy, electric vehicles, energy efficiency, waste management and climate-smart agriculture, with the goal of significantly reducing CO2 emissions.
(Left to right) AC Ventures’ Founding Partner Pandu Sjahrir, AC Ventures’ Managing Partner Helen Wong, Australian Investor Mission leader Jennifer Westacott and Australian Embassy Charge d’Affaires Gita Kamath with a tumpeng, a rice dish which is served in Indonesia to mark a special occasion. Photo: JEFRI TARIGAN
Australia’s Ambassador for Climate Change, Kristin Tilley, said the Australian government was mobilising more public and private finance for developing countries to tackle the impacts of the global climate crisis.
She said for every dollar invested by the Australian government; ADI had attracted more than five dollars of private sector funding.
“Through ADI, Australia is investing in Indonesia’s net zero transition and in Indonesian women’s economic empowerment.”
– Kristin Tilley