Financing Model Innovation to Provide Electricity Access and Eradicate Poverty in Disadvantaged Regions in Indonesia.


Cooperation between UNDP, Directorate General of New and Renewable Energy and Energy Conservation of Ministry of Energy and Mineral Resources (EBTKE-ESDM) with the support of BAZNAS through zakat funds and Bank Jambi with CSR funds for Fulfilling Electricity Access and Poverty Eradication in Jambi Province.


Jambi, 5 September 2018 —  Four remote villages in Jambi will finally have access to electricity as the result of a collaboration involving a new scheme of funding.  The United Nations Development Programme (UNDP) together with the Directorate General of New and Renewable Energy and Energy Conservation (DJEBTKE) of the Ministry of Energy and Mineral Resources (ESDM) and the Jambi Provincial Government constructed and revitalized Micro Hydro Power Plants (PLTMH). This activity was made possible thanks to financial support from the National Zakat Agency (BAZNAS) and Bank Jambi, and technical assistance from UNDP.

Through innovative financing model, UNDP together with EBTKE are supported by zakat fund from BAZNAS amounting to USD350,000 (around IDR4.8 billion) and CSR fund from Bank Jambi amounting to USD281,357 (around IDR3.76 billion). This fund is used to build a new PLTMH and revitalize three units of PLTMH which provide electricity access to four villages in Jambi Province.

The infrastructures provide electricity access to four villages inhabited by 803 households comprising 4,448 people. Data from the ESDM Ministry revealed that the electrification ratio in Jambi is 91.40% which is still below the national ratio of 95.35% (until December 2017). With access to electricity, villages will increase their potential for economic development, and improve health and education services for the people. 

"The government welcomes this joint initiative based on innovative financing, and strongly supports this micro-hydro power generation program as one of the New and Renewable Energy. The construction and revitalization of the micro hydro power plants in Jambi is also in line with the goal of EBTKE-ESDM to ensure that the country’s 'Equitable Energy' vision can be realized,” said Mr. Noor Arifin Muhammad, Director for Planning and Infrastructure Development, Directorate General of EBTKE-ESDM.

"This is the first-time Zakat funds are used for attainment of Sustainable development objectives in Indonesia, and most likely in the entire world.  Prior to the kickoff of the 6-month project, intensive preparation was done within 7 months.  We made thorough assessment of the profile of the villages, to ensure that zakat funds were reaching those most needing such assistance. We also made sure that the local stakeholders and communities were consulted to identify their needs on the ground and deliver solutions that they needed and valued.  "said Dr. Bambang Sudibyo, Chairperson of BAZNAS.

 “The Jambi micro hydro power plant initiative contributes to attainment of number of Sustainable Development Goals (SDGs), especially in improving access to clean and affordable energy (SDG 7) to support poverty eradication (SDG 1) and improving access to education (SDG 4). Beyond providing electricity, this project has long-term impact on equal distribution of development,” said Bambang Brojonegoro, Minister for PPN/Head of Bappenas. 

"We live in the era of Sustainable Development Goals, and the construction of the micro hydro power plant is very important because the electricity that will enter the villages for the first time will give hope and opportunity for the residents. Previously, there is no adequate lighting to serious medical processes like childbirth; children studied and worshipped with candlelight; and without electricity, and there were literary no opportunities for entrepreneurship, limiting livelihood choices of people. This is also the first and very promising example of new form of partnership between the Government, faith based organization, private sector and development organization for the common goals -  which clearly contributes to the community wellbeing, opens sustainable and environmentally sound pathways for development and livelihoods, and creates enabling environment for better healthcare and education. In the era of Sustainable Development, these are the partnerships to pursue to ensuring that no one is left behind and development gains reach each and every member of the society.," concluded Sophie Kemkhadze, Deputy Country Director of UNDP Indonesia.




















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