Indonesia Boosts Green Investment to Achieve High Economic Growth

JAKARTA - Investment in the renewable energy sector is considered to be the main key for Indonesia to pursue economic growth targets of up to 8 percent per year while improving the quality of national investment. Director of International Collaboration of the Institute for Development of Economics and Finance (Indef) Imaduddin Abdullah revealed that to become a high-income country by 2045, Indonesia needs economic growth in the range of 6 to 8 percent, surpassing the current average growth of 5 percent. "If we look at global investment between fossil fuels and clean energy since 2018, it has shifted. Green energy is no longer talking about the environment, but also how to diversify energy so that our economy is more resistant to global turmoil," said Imaduddin at the BIG Strategic Forum 2026 event in Jakarta, Tuesday. Global Trend Shifts and Economic Resilience Imaduddin explained that renewable energy has now transformed from merely an environmental agenda into an economic strategy and national energy security. Diversification into clean energy is considered capable of reducing Indonesia's dependence on fossil fuels that are vulnerable to the impact of global geopolitical uncertainty. The economic benefits of this energy transition will have a greater impact if it goes hand in hand with the electrification process in various sectors. Encouraging Investment Efficiency and Reducing ICOR The development of renewable energy and electrification is believed to be able to create a domino effect (multiplier effect) for various supporting industries. Imaduddin gave an example: Development of Solar Power Plant (PLTS): Encourage investment needs in the battery industry and its supporting components. Electric Vehicle Ecosystem (Electric Vehicle): Trigger investment growth in charging station infrastructure.This intersectoral linkage can ultimately reduce Indonesia's Incremental Capital Output Ratio (ICOR), which means that every rupiah of capital invested is able to generate much more optimal and efficient economic output.