Sumitomo Mitsui Financial Group Inc. agreed with the World Bank and the U.S. Agency for International Development to advise Indonesia on funding renewable energy projects as the country plans to boost power generation.
The partners signed an agreement to advise local banks on mitigating investment risks and getting the projects to qualify for UN-certified carbon credits.
Indonesia goverment last year announced a plan to spend $17.3 billion to meet power demand by adding 10,000 megawatts of capacity by 2012, with more than half coming from cleaner sources including hydro and geothermal power.
Sumitomo Mitsui expects the agreement will pave the way for it to obtain syndicated loan
contracts with Indonesian banks to finance the renewable energy projects.
contracts with Indonesian banks to finance the renewable energy projects.
Bank Central Asia is in talks with Sumitomo Mitsui and is in the early stages of considering two projects to finance. Sumitomo Mitsui forecasts Indonesia needs investment of as much as 500 billion yen ($5.6 billion) on the renewable-energy projects.
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