Green Funds for Indonesia's Energy Future

The sovereign green fund is not merely a financial instrument but a symbol of the state’s seriousness in building a sustainable and sovereign energy future. Jakarta (ANTARA) - Changes in the global energy landscape in recent years show that energy is no longer just an economic need but an important part of global geopolitical strategy. The Russia-Ukraine conflict became a turning point that shook international energy stability. World crude oil prices once surged above 120 US dollars per barrel in June 2022, based on data from the US Energy Information Administration. At the same time, gas prices in Europe rose by more than 300 percent compared to the previous year, according to the International Monetary Fund (2022). The impact was widespread on global inflation and the world’s economic slowdown, which only grew by around 3.4 percent in 2022, based on the IMF’s World Economic Outlook 2023. This situation shows that dependence on cross-border fossil energy carries very significant economic risks. When geopolitical conflicts arise, energy-importing countries will be the most vulnerable parties. This threat is increasingly real because around 20 percent of the world’s oil supply, or about 17 million–20 million barrels per day, passes through the Strait of Hormuz, according to the US Energy Information Administration (2023). The World Bank in its Commodity Markets Outlook (2023) even warns that disruptions in the region could trigger a 30–50 percent rise in global oil prices in a short time. Indonesia is not outside this vortex of pressure. Dependence on oil and gas imports is still quite high. Data from the Central Statistics Agency shows that Indonesia’s oil and gas imports reached 36.2 billion US dollars in 2023 and became one of the main contributors to the national oil and gas trade balance deficit. On the other hand, the burden of energy subsidies also surged sharply. The Ministry of Finance recorded that energy subsidy realisations reached more than Rp339 trillion in 2022 due to global energy price volatility. This situation shows that energy issues are not just environmental concerns but have become fiscal and national economic resilience issues. When global energy prices fluctuate, the state’s fiscal space is also pressured. In such conditions, Indonesia needs a new financing strategy that can not only support the energy transition but also maintain long-term economic stability. Strategic instrument