RRI.CO.ID, Jakarta - The National Committee for Sharia Economics and Finance (KNEKS) is advancing efforts to expand renewable energy financing in Indonesia through Islamic financial innovation.

One emerging option is combining sukuk instruments, Islamic-compliant bonds that represent ownership in assets rather than interest-bearing debt, with Islamic social funds to support solar energy projects.

KNEKS presented this idea in a discussion titled “Green Sukuk for Energy Transition: Innovative Financing Models for the 100 GW Solar Energy Program.” The scheme is considered a potential source of funding for the national energy transition program.

“In the future, we can develop a blended financing scheme between sukuk and Islamic social financial instruments, so that renewable energy projects can be financed more innovatively and sustainably,” said Dwi Irianti Hadiningdyah, Director of Islamic Social Financial Services at KNEKS, in Jakarta on Thursday, March 12, 2026, as quoted by Antara.

Dwi explained that, in addition to green sukuk, funding could be expanded through cash waqf-linked sukuk (CWLS), zakat, and other sharia-compliant social funds. She said these instruments, when combined, could reduce the dependence of renewable energy projects on conventional financing.

She added that the potential for national zakat is estimated at around IDR 327 trillion (USD 19.33 billion) per year, while the potential for cash waqf is estimated at around IDR 180 trillion. “This potential can be mobilized to support sustainable development, including solar energy development,” she said.

Dwi also noted that waqf assets could be used to develop renewable energy infrastructure, such as solar panel installations, which provide direct benefits to communities.

On the same occasion, Deni Ridwan, Director of Sharia Financing at the Directorate General of Financing and Risk Management of the Ministry of Finance, said the government continues to encourage the use of sharia financing instruments to strengthen the green economy.

“Projects supported by green sukuk financing have contributed to a reduction in carbon emissions of more than 10 million tons of carbon dioxide,” Deni said.

He added that green sukuk also opens opportunities to expand the investor base concerned with environmental, social, and governance (ESG) factors. The instrument is considered strategic in supporting the national energy transition agenda.

Meanwhile, Roy Abimanyu, Deputy Expert for Cooperative Development at the Ministry of Cooperatives, said renewable energy development can boost economic activity in rural communities.

Roy cited microgrid-based solar power plants in several island regions with limited access to electricity as an example. He explained that such energy can support production facilities, including refrigerators, ice factories, and fish processing facilities, thereby increasing added value for coastal communities.

Collaboration between the government, the financial sector, religious institutions, and the community is expected to accelerate investment in renewable energy. This step also supports Indonesia’s target of achieving net-zero emissions. ***