‘Indonesian banks disbursed $7.2 billion for coal industry amid climate crisis’
Report says lack of consistent energy transition strategy contributes to ongoing financing of coal sector in Indonesia
JAKARTA, Indonesia (MNTV) – Amid growing concerns over the climate crisis, Indonesian banks poured more than $7.2 billion to finance the coal sector between 2021 and 2024, a report has revealed.
The report by the Bersihkan Bankmu Coalition, titled “Funding the Climate Crisis: How Banks in Indonesia Support Coal Financing”, underscores the continued financial support for coal companies, while revealing that five major national banks accounted for $5.6 billion of the total $7.2 billion.
Bank Mandiri was the largest contributor with $3.2 billion, followed by Bank Rakyat Indonesia (BRI) with $809.5 million, Bank Negara Indonesia (BNI) $719.6 million, Bank Central Asia (BCA) $451 million, and Bank Permata $424 million, the report says, as quoted by Indonesia Business Post.
This continued financing trend stands in stark contrast to global efforts to curb carbon emissions and mitigate the impacts of climate change.
The coalition’s report highlights how weak government policies and lack of consistent energy transition strategy contribute to the ongoing financing of the coal sector, particularly through coal-fired power plants (PLTU) and coal mining operations.
Persistent coal financing is also driven by the government’s contradictory stance on energy transition. While the Financial Services Authority (OJK) has categorized coal mining and unabated coal power plants as harmful to the environment and climate, the government has yet to introduce concrete measures to phase out coal.
The government’s most recent energy plan, the 2025-2034 Electricity Supply Business Plan (RUPTL) for state-owned electricity company PLN, includes the construction of additional coal-fired power plants. These plants are expected to add up to 6.3 gigawatts (GW) of capacity over the next decade, exacerbating Indonesia’s reliance on coal despite its commitment to addressing climate change.
The government is also pushing forward with plans to add 11 GW of captive coal power plants by 2026, which would primarily serve industrial facilities directly connected to coal power plants. This move contradicts President Prabowo Subianto’s ambitious pledge to achieve 100% renewable energy by 2030.
Nabilla Gunawan, lead author of the report and researcher with the Coalition, said that the government’s inconsistency in energy policy is a major barrier to the transition to renewable energy.
The lack of firm commitment to phasing out coal means that Indonesian banks have no clear directive to cut off funding to coal projects, with five of the largest banks in the country continuing to fund projects that directly contribute to climate change and thereby undermining Indonesia’s international commitments to sustainability.
“While the government recognizes the environmental and climate risks associated with coal, the fact that these policies are not consistently enforced or fully implemented leaves banks with little incentive to adopt stronger coal exclusion policies. These financial institutions continue to funnel billions of dollars into the coal industry, which ultimately endangers long-term environmental sustainability and their own financial stability,” Nabilla said.
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