The Indonesian Ministry of Finance has introduced a series of fiscal incentives to attract investment in the energy transition and sustainable development sectors.
Boby Wahyu Hernawan, Head of the Center for Climate Finance and Multilateral Policy at the Fiscal Policy Agency (BKF), said the incentives are designed to make it easier for investors to enter the green infrastructure sector.
“These incentives are aimed at encouraging companies to invest in programs that shift jobs from fossil-based sectors to greener industries,” Boby said on Thursday, August 21, 2025.
The government has prepared a wide range of facilities, including tax holidays, tax allowances, super tax deductions, and exemptions on government bond value-added tax and import duties. In 2023 alone, the government allocated around Rp27.9 trillion (US$1.7 billion) in tax incentives to support the energy transition.
A notable measure is the super tax deduction policy, which provides up to 200 percent tax relief for job training programs and as much as 300 percent for research and development (R&D) activities in the energy sector moving from fossil fuels to green technologies.
Boby emphasized that Indonesia’s commitment to sustainable finance extends beyond domestic policies. The government is also actively building international partnerships.
One example is the Joint Policy Initiative (JPI) Indonesia, alongside cooperation with multilateral institutions such as the Green Climate Fund (GCF). So far, Indonesia has secured 19 projects and programs worth US$578.4 million in support from the GCF.
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