Formulating Revolving Fund Scheme to Support Energy Efficiency Projects in Indonesia

Energy subsidy has become an onerous burden for the Indonesian state budget. The Ministry of Finance has provided various forms of fiscal incentives to influence economic actors for implementing energy saving programs i.e. taxation and customs facilities for spare parts in manufacturing energy-efficient appliances. Nevertheless, those incentives are not yet fully affecting the enhancement of energy efficient investment. The Government needs to make a breakthrough in order to catalyse the market which in the long run can generate energy efficiency enhancement projects. This study sought to establish a form of revolving fund scheme by analysing the drawbacks of its implementation.