An energy trading company, PT AKR Corporindo Tbk (IDX: AKRA) open a possibility to build an electric vehicle (EV) charging station in its refueling station - Photo by IStock

JAKARTA (TheInsiderStories) – The Financial Services Authority (FSA) plans to give an incentives for the purchasing and credit distributions for the electric vehicle (EV) in Indonesia, said the chief executive today. Earlier, the transportation minister has issued the regulations related to EV to anticipate the growing number of futuristic vehicles that use electric power.

According to chief executive at FSA, Heru Kristiyana, in a letter to the directors of commercial banks on Sept. 1, 2020, the agency provided the incentives in the form of providing funds to debtors for the purpose of purchasing EV or developing upstream industries, such as batteries, charging station industries, and component industries that can categorized as fulfilling the provisions for the implementation of sustainable finance.

Provision of funds for the purchase of electric vehicle and their infrastructure can be categorized as a government program that is exempted from the maximum credit limit, if its guaranteed by state-owned and local government or insurance financial institutions, inline with the FSA regulation No. 38/POJK.03/2019, concerning the Legal Lending Limit and Large Funds Provision.

Credit quality assessment for the purchase or development of the upstream industry from EV with a ceiling of up to Rp5 billion (US$340,136.05) is only based on the accuracy of principal payments or interest as regulated in POJK No.40/POJK.03/2019 concerning Asset Quality Assessment for Commercial Banks.

Then, credit for the purchase of EV or the development of the upstream industry for the individuals or small and medium business enterprises can be subject to a risk weight of 75 percent in the calculation of Risk Weighted Assets in accordance with OJK Circular No.11/SEOJK.03/2018 concerning Guidelines for Calculating Weighted Assets

Based on the Risk for Credit Risk Using the Standard Approach, its quite low when compared to the risk weight for the corporation without a rating about 100 percent. Apart from this, these incentives are in accordance with POJK No.51/POJK.03 / 2017 concerning the Implementation of Sustainable Finance for Financial Service Institutions,

In addition, issuers and public companies that implement sustainable finance effectively can be granted incentives by FSA in the form of participating in human resource competency development programs or awarding a sustainable finance award. In the last five years, environmentally friendly vehicles powered by electric motors are still in limited use in certain locations such as malls, airports, ports and open areas where work or sports facilities.

Not limited to special areas, this environmentally friendly vehicle will soon operate on the roads in big cities, one of which is an online taxi company with the Grab flag in collaboration with South Korea’ Hyundai Motor Co., to build an ecosystem for electric motorbikes in Indonesia.

Directorate general at transportation ministry, Endy Irawan, said to prepare a legal umbrella for EV in traffic, his office has rolled out two regulations. First, the minister of transportation Regulation Number 44 of 2020 concerning Physical Type Testing and Number 45 of 2020 concerning Certain Vehicles Using an Electric Motor Drive.

Referred to the regulations, besidetwo-wheeled vehicles (motorbikes), four-wheeled vehicles (cars, and buses) with electric propulsion, also applies to certain electric motorized vehicles used in limited areas (not on roads) such as electric bicycle, scooters electric, hoverboard, unicycle, and electric otopet.

The operation area of ​​certain motor vehicles with electric motor drives on public roads is on bicycle lanes that are specially provided. This vehicle can operate on sidewalks, but must pay attention to the safety of other road users – pedestrians. Certain vehicles with an electric motor, he said, have recently operated in certain areas.

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