Thursday, 10 September 2020 07:30

Flooding Incentives from the Government to Ground Electric Cars

The government seems to have really revived the electric car industry in Indonesia. The Financial Services Authority (OJK) has also prepared an incentive scheme for banks to channel battery electric vehicle (BEV) financing. The focus of the incentives is to boost the upstream electric vehicle industry, including manufacturers of batteries, charging stations and components. "OJK encourages national banks to participate in the achievement of the battery-based electric motorized vehicle (KBL BB) acceleration program," said Deputy Commissioner for Public Relations and Logistics Anto Prabowo in his written statement, Jakarta, Friday (4/9).

Since September 1, OJK has written to the directors of conventional commercial banks to provide funds to debtors who buy electric vehicles or to upstream industry developers. The distribution of funds for the KBL BB development program also receives an exemption from the maximum credit limit guaranteed by the insurance financial institution of BUMN and BUMD.

Other incentives that will be received by electric vehicle entrepreneurs are the provision of credit with a ceiling of Rp 5 billion and credit quality assessment which is only based on the accuracy of principal or interest payments. This provision is in line with the Financial Services Authority Regulation (POJK) Number 40 / POJK.03 / 2019 concerning Commercial Bank Asset Assessment. Finally, KBL BB purchase credits for individuals or micro and small business entities (MSEs) can be subject to a risk weight of 75% in calculating risk-weighted assets (RWA). This risk weighting is classified as low if it is compared with the risk weighting for unrated corporations that reaches 100%. Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said fixing the upstream electric car industry means taking big steps to accelerate its development. "To develop a national electric vehicle, I am among the most determined. Because we don't want to continue to be a market for imported vehicles, ”he said at the end of last week.

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