Group Discussion : Wakaf As The Alternate Fund for Solar PV Development


As the process to develop funding mechanism for development of solar photovoltaic (PV) in Indonesia, the Institute for Essential Services Reform (IESR) and the Association of Indonesia Solar Energy held a joint discussion with Dr. Hayu S. Prawabowo, Head of the Institute for Environment and Natural Resources Development, Majelis Ulama Indonesia (LPHSDA-MUI) in IESR office on Tuesday, October 24, 2017.

Discussion on funding mechanism for solar PV rooftop development with IESR, AESI, LPLHSDA MUI and YLKI

Funding mechanism is one of seven aspects that are being set up to support the national initiative of one million solar PV rooftop launched on 13 October 2017. The initiative aims to encourage the aspirations of communities and various parties to support the development of solar power plants with target capacity of 6,3 GW in 2025

“One of the challenges in renewable energy development – especially for the solar power plant is the lack of financial support from various financial institutions. Therefore, it is necessary to develop a funding mechanism that enables various financial institutions, such as banking or other public institutions to support this initiative, “said Fabby Tumiwa, Executive Director of IESR in opening discussions.

According to Dr. Ir. H. Hayu S. Prabowo the development of solar power plants is line with Islamic teachings and Eco Mosque concept which is developed by his institution. Where the mosque is not only as a place of worship, but also become the center of the community activities that protect the environment and natural resources.

Dr.Ir H. Hayu S. Prabowo, Head of Institute for Environment Protection and Natural Resources, Majelis Ulama Indonesia.

“The use of clean and renewable energy such as solar rooftop can be categorized as an effort to implement one of the obligations in Islam which is to keep the future of a good offspring,” said Hayu.

Eco mosque itself, according to Hayu has adequate capacity in encouraging the development of renewable energy through the development of Waqaf fund which currently reaches Rp. 7 trillion and 800,000 mosques spread throughout Indonesia. The use of waqaf funds for the development of renewable energy, according to Hayu is very possible because it will not only provide benefits for the communities, but also an opportunity to encourage productive activities, both for the mosque and surrounding communities.

The sharia economists also explain, there are three mechanisms that can be used to use waqf funds through sharia banking, capital markets or the use of crowd funding. As a follow up to this discussion, the Ministry of Energy and Mineral Resources will hold a limited discussion involving parties-including banking institutions and solar and government development companies to build a model of funding mechanisms applied in a pilot project.