Local financial institutions are reluctant to finance EE on a project basis, because of their perceived high risk, small transaction size, small market potential, high transaction costs and a lack of the internal evaluation capacity needed to assess the risks and cash flow benefits generated from EE projects (EPS Capital Corp, 2020). De-risking instruments play a crucial role in mitigating risks and fostering investment in energy efficiency projects. Among the available solutions, guarantee and insurance are among the recommended tools (Koutsandreas et al., 2022). Insurance for energy efficiency projects is generally known as energy savings insurance (ESI). The government of Indonesia is currently considering implementing an ESI scheme in Indonesia. Various international organisations, such as OECD-CEFIM and UKPACT, are supporting this Indonesian government initiative.

Read More: Energy Savings Insurance (ESI): Mechanism, Lessons Learned and the Potency of Implementation in Indonesia