Toward a Sustainable Energy Transition: The Architecture of Islamic Finance in Indonesia's Biogas Sector

Abstract

Indonesia is an agricultural country with abundant potential for bioenergy (biodiesel, bioethanol, 
biomass, and biogas), with Indonesia's biofuel consumption and production expected to increase by 50 
percent. This potential is one of the foundations for reducing carbon emissions by replacing fossil 
energy with new and renewable energy. Therefore, this study aims to analyze the government's 
initiative to use biogas through PLTBg. This study uses SWOT analysis through the Berlian Porter model 
approach with secondary data to prepare a strategic architectural framework. The research results are 
based on the findings in the development of financing for biogas utilization through PLTBg in the 
preparation and acceleration (short term), expansion (medium term), and final goal achievement (long 
term). The financing process uses the build, own, operate, and build-own transfer business model 
approach by implementing the 5C Principles integrated with ASRI principles. In order to optimize the 
biogas financing process, an agreement was made between the stakeholders involved to create new and 
renewable energy efficiency in the biogas sector through PLTBg and create a healthy business climate 
competition to avoid agency problems. The hope is that when this strategic architecture is used 
correctly, the acceleration of the transition project in the new renewable energy sector, especially 
biogas, through PLTBg through a funding scheme or financing for the financial services industry can be 
realized.