SM Teo Chee Hean at the 2nd Indonesia International Sustainability Forum

My good friend
Menko Luhut Pandjaitan,
Excellencies,
Distinguished Guests,
Ladies and Gentlemen,

Introduction

Good afternoon. Thank you for inviting me to speak at the Indonesia International Sustainability Forum 2024. I would like to congratulate Kemenko Marves and Kadin Indonesia for hosting this significant event.

The world is currently on a pathway to 2.1 to 2.8 degrees Celsius of global warming by 2100. This is too much. Increasingly, through floods and heat waves, all of us are seeing how climate change can profoundly disrupt lives and livelihoods.

Combating climate change will require the collective and consistent action of all stakeholders.

Asia must be at the forefront of change. We have more than half of the world’s population, and are one of the key engines of global economic growth.

Today’s ISF gathers many stakeholders who are committed to advancing ASEAN’s net-zero ambitions. There is much that we can do and do together. Let me suggest three key practical sustainability pathways towards a net-zero ASEAN.

Building up Energy Infrastructure and the ASEAN Power Grid

The first sustainability pathway is building up green energy infrastructure. ASEAN is blessed with significant renewable energy potential. Indonesia itself has abundant solar, wind, hydropower, and geothermal energy resources.

We can work together to realise this potential through our vision of an ASEAN Power Grid. Regional grids can better match supply with demand – countries that can produce more renewable energy than they need can export the excess. An ASEAN Grid will also allow seasonal variations in green energy output to be balanced out across the region. The revenue created will improve the bankability of renewable energy projects, which will in turn accelerate the deployment of more of such projects and support the phasing out of fossil fuels. It is a virtuous cycle.

Within ASEAN today, we have several bilateral interconnections over land. But much of ASEAN is archipelagic, especially Indonesia. We need stronger transmission systems to underpin our regional energy transition, and to build climate resilience. If we want a truly interconnected regional grid in ASEAN, we must work together to develop subsea cables. This will allow electricity to be traded along multiple routes and in multiple directions.

Indonesia and Singapore are collaborating to advance the development of a regional power grid. At the inaugural ISF last year, Indonesia and Singapore jointly announced Conditional Approvals for five projects to import 2GW of low-carbon electricity from Indonesia to Singapore. This year, we will advance these projects to the next step of development by issuing them Conditional Licences.

We will also be issuing new Conditional Approvals to two more projects to import an additional 1.4GW of low-carbon electricity from Indonesia to support our future energy needs. Singapore’s Second Minister for Trade and Industry Dr Tan See Leng will elaborate on this later.

When these projects are realised, they will catalyse Indonesia’s green economy by supporting investments for manufacturing solar photovoltaics and battery energy storage systems. These projects will also be one of the first building blocks for an expanded ASEAN Power Grid.

Let’s work together to strengthen both domestic grids, and cross-border energy infrastructure overland and under the sea. This will create new pathways and new possibilities, and a stronger, more climate resilient and integrated ASEAN. All of us know there is no transition without transmission!

Scaling Up New Technologies

The second sustainability pathway is the scaling up of new green technologies, by mainstreaming them, and lowering the costs.

Carbon Capture and Storage, or CCS, has an important role to play in allowing us to achieve our net-zero targets. There is growing international recognition that CCS technology can safely and permanently store carbon within the ground to decarbonise our emissions.

We will need to devote resources to develop this technology, bring the costs of implementation down, and make it a viable part of ASEAN’s decarbonisation path. Governments will also need to establish legal frameworks to encourage the use of CCS.

Indonesia and Singapore are also collaborating closely on CCS. In January 2024, Indonesia became the first Southeast Asian country to develop cross-border CCS-related legislation. One month later in February 2024, Singapore signed a Letter of Intent with Indonesia to collaborate on CCS.

We hope to continue working with Indonesia and other partners in the region to catalyse the deployment of cross-border CCS projects in ASEAN.

Financing

The third sustainability pathway is financing for decarbonisation projects.

Large-scale investments in renewables cannot be financed solely by the public sector nor solely by the private sector. Blended financing initiatives can help derisk projects, improve project bankability, and draw in more commercial capital.

One way that Singapore is supporting blended financing is through Singapore’s Financing Asia’s Transition Partnership, or FAST-P. FAST-P aims to mobilise up to US$5 billion from public and private sector partners to de-risk and finance currently marginally bankable green and transition projects in Asia. This will complement the existing suite of initiatives aimed at financing climate-related projects in the region.

Closing

The size of the climate challenge is daunting, and time is not on our side. But there are clear pathways to success. There are many opportunities for Indonesia and Singapore to work together, and with other ASEAN member states, to create a sustainable ASEAN for the future together. Through today’s ISF, I hope we will be able to turn more of these opportunities into reality. I thank all of you for your attention and I wish you all the best in our sustainability journey.