October 04, 2023

UrbanShift Asia Forum: Financing Climate Action in Cities 2023

As part of the UrbanShift Asia Forum, C40 Cities organized a High-Level Investors Roundtable session to discuss financial strategies for bus electrification and vehicle logistics in India and Indonesia. The session served as a platform for discussion for country policy makers and the private sector to support financial models and strategies to accelerate and improve budget implementation of climate-related programs in sustainable transportation.

ITDP Indonesia’s Interim Director, Gonggomtua E. Sitanggang, moderated the event held in New Delhi, India on September 25, 2023. Gonggom started the session with a presentation titled “Powering Change: Exploring Innovative Business Models for Transjakarta Electrification.” Present as panel speakers were Head of Road Transport Division of DKI Jakarta Provincial Transportation Agency, Ferdinand Ginting and Head of Jakarta Investment Center, Tona Hutauruk.

ITDP Indonesia Interim Director, Gonggomtua E. Sitanggang presented a presentation titled "Powering Change: Exploring Innovative Business Models for Transjakarta Electrification."

Gonggom explained about driving change through an innovative business model for Transjakarta electrification with a target percentage of 100 percent transition to electric buses by 2030. However, the business model for Transjakarta electrification has a number of challenges in terms of funding and financing. Gonggom emphasized on the efforts to address the challenges of Transjakarta electrification consisting of:

  • Viable commercial arrangements through options such as buy the service (BaU model) and concessional models to arrange upfront financing and increase flexibility.
  • Alternative funding schemes consisting of public financing and private financing to attract various investors and also provide increased flexibility.
  • Collaboration with various parties, especially the private sector with the aim of reducing risks in e-bus project implementation.

Gonggom also added that other efforts to reduce the risk of implementing the Transjakarta bus electrification project are choosing alternative business models through funding schemes (choose & prioritize), collaboration with fund management and finance from the government and private sectors to improve cost effectiveness (collaborate), conducting thorough feasibility studies such as operational arrangements (conduct), and exploring business models and other financing scheme scenarios (explore).

Head of Jakarta Investment Center (JIC), Tona Hutauruk responded that Transjakarta has a great opportunity to intervene in other areas, including finance with government agencies such as BUMD, to improve services as electrification-based public transportation in the future. However, Tona also added that it is important to find alternatives for funding electric buses and JIC can facilitate investors by getting mutual benefits to various parties. In addition, Ferdinand Ginting, Head of the Road Transport Division of the DKI Jakarta Provincial Transportation Agency, added that the agency is also implementing self-managed buses by exploring business-to-business (B2B) schemes through the central government to the Jakarta government.

(Left to right) Interim Director of ITDP Indonesia, Gonggomtua E. Sitanggang, Head of Road Transport Division of DKI Jakarta Provincial Transportation Agency, Ferdinand Ginting and Head of Jakarta Investment Center, Tona Hutauruk.

The session ended with Gonggom summarizing that the bus electrification transition can provide a good opportunity for third-party investors by first reviewing the existing regulatory framework and operator capacity. Thus, operators will be better prepared to work with investors to get the investment. The forum continued with a presentation by Harsimran Kaur from ICCT and closed with a closing statement by Andrea Fernandez, Managing Director, Climate Finance, Knowledge and Partnership, C40 Cities.

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