Blended Financing Sukuk Can Support Solar Energy Development

Jakarta — Blended financing schemes are highly flexible for meeting various requirements linked to Islamic financing. The National Committee for Islamic Economics and Finance (KNEKS) proposes combining sukuk instruments with Islamic social funds to strengthen financing for solar energy projects in Indonesia.

Dwi Irianti Hadiningdyah, Director of Islamic Social Financial Services at KNEKS, stated that blended financing schemes merging commercial financing instruments with Islamic social instruments can open more innovative financing opportunities for renewable energy development.

“Going forward, we can develop blended financing schemes between sukuk and Islamic social financial instruments, so that renewable energy project financing can be conducted in a more innovative and sustainable manner,” said Dwi in a statement.

In a discussion titled “Green Sukuk for Energy Transition: Innovative Financing Models for the 100 GW Solar Energy Programme”, she noted that beyond Green Sukuk, renewable energy financing sources can also come from cash waqf linked sukuk (CWLS), zakat, and other social funds.

She assessed that combining these instruments can serve as an alternative to expand funding sources for renewable energy projects, which have traditionally relied heavily on conventional financing.

Dwi explained that Indonesia possesses significant Islamic social fund potential that can be leveraged to support sustainable development. National zakat potential is estimated at approximately Rp327 trillion per year, whilst waqf fund potential is estimated at approximately Rp180 trillion.

“This potential can be mobilised to support sustainable development, including solar energy development,” she said.

Additionally, she highlighted opportunities to utilise waqf assets for renewable energy infrastructure development, including solar panel installations that can provide direct benefits to communities.