Indonesia: $1B Southeast Asia Climate VC Funding, Indonesia Energy Infrastructure & Investments, and Emerging vs. Developed Country Carbon Debates - E350

· Indonesia,Women,VC and Angels,climate tech

“I really love a lot of the climate funds coming into the region right now because they're attacking the problem exactly where we need it, which is on a consumer basis. There are a lot of these climate funds now addressing things mainly from a consumer perspective or from things that are much more easily addressable. If there's one thing I love about this region is the fact that oftentimes, when private sector and when individuals really take charge and we band together, it's actually enough to sway the public sector and legislators. Although a lot of people can look at it as the government just being reactive, it's also nice to have a government that reacts and adapts to the wants and needs of not just citizens, but other players. That, for me, is where I find a lot of the hope from these new climate players coming in and trying to address things from a consumer level.” - Gita Sjahrir

“I watched a documentary about the South Africa energy crisis wherein they experience brownouts and blackouts. People know it's a problem now, and if you have chronic underinvestment and for whatever set of reasons, then you end up in a situation where the worst scenario is not higher prices for electricity, it just means you don't have enough electricity and then everything goes to crap after that, because if people can't travel, people can't use their internet, can't coordinate, can't manufacture, then you have economic crisis, you have a political accountability crisis, society crisis, so lots of different angles. I think people forget that the worst case scenario is not a higher price or net emission. It's just there's a really negative set of circumstances that can pop out.” - Jeremy Au

“No country today can truly stand alone and do well and thrive. The fact is we're all in each other's business. We're all exporting, and importing to each other. We're all experiencing migrations of people. We’re experiencing these global movements because that's the reality of constantly developing economies. The more humanity develops and improves, the more we're all going to keep seeing, meeting each other, and working together. That’s why I'm also very pro working together with other countries to help energy transition agendas work in multiple countries, not just in emerging markets.” - Gita Sjahrir

Gita Sjahrir, Head of Investments at BNI Ventures, and Jeremy Au discussed three main topics:

1. Southeast Asia Climate Investment: Jeremy and Gita talked about DealStreetAsia’s article on the $1B of climate investment capital now available across Southeast Asia, e.g. Aera VC, led by Derek Handley (a previous BRAVE guest), which raised $50 million for industrial decarbonization, Radical Fund, led by Alina Truhina (a previous BRAVE guest) ’s first close of $40 million Southeast Asian investment vehicle, Eversource Capital looking at $700 million for its second investment vehicle, and ADM Capital raising a $200M Indonesia climate-focused fund. Gita emphasized the challenges and opportunities of such an investment thesis.

2. Indonesia Energy Efficiency and Infrastructure Mechanics: Jeremy and Gita dived into Indonesia's push to transition to renewable energy, the use of positive behavior economics and respecting contracts to encourage companies to adopt sustainable practices. She highlighted the importance of understanding the limitations and stages of development in different islands and the challenges of establishing energy baselines, grid infrastructure, and cost control across fragmented energy markets.

3. Emerging vs. Developed Country Carbon Debates: Jeremy and Gita explored the contrast between developing and developed economies in terms of incentives. They highlighted the correlation between emissions per capita, energy consumption per capita, and GDP per capita, and the need for careful planning in the early retirement of power plants. They also touched on the dependence on the Chinese solar cell industry and the potential risks of supply chain disruptions, as well as the energy crisis in South Africa and its impact on economic growth. She emphasized the differences in pressure faced by developing markets compared to developed ones and underlined the need for representing local perspectives in global media narratives.

They also talked about Nepal’s recent TikTok ban, the evolving nature of young democracies, the geopolitical and macroeconomic factors influencing energy policies, and the government’s role in adapting to the needs of their citizens and international partners.

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(02:30) Jeremy Au:

Morning, Gita.

(02:31) Gita Sjahrir:


(02:32) Jeremy Au:

Well, I just want to say that our episodes together have been amazing because people are really in love with what you've been sharing. So shout out to Shiji for sharing what he liked about it. And he was just like, Hey, more Gita. That was a funny email. And also, nice words from Jesslyn as well that she enjoyed, I think, the dive into what was the TikTok shop and what it meant for the region as well. So many nice words and emails. So, yeah, how do you feel, Gita

(02:57) Gita Sjahrir:

Oh, thank you so much. Thank you so much for the shout out and for the feedback. And also, if anyone has any particular thing that they're curious about Indonesia, I would love to give insights on that if I know anything, of course. And also check out all the other episodes with Jeremy because some of these people are my friends and I love them and others are friends I haven't met yet, so would love to meet them one day. Maybe we should have a Jeremy podcast reunion and we all get to know each other. So check out all the other episodes.

(03:30) Jeremy Au:

And I think what's interesting as well is that, you and I have been continuing to chat over WhatsApp. And I think at the last episode, a month ago, we predicted that there'll be more regulatory dominoes because of the precedence is being set. And we saw that Nepal recently just banned TikTok entirely which is unexpected, but also expected. How do you think, Gita?

(03:49) Gita Sjahrir:

Yeah. I think that's the thing, right? Being from this region, so many things are both unexpected and expected at the same time because I think you're dealing with a lot of young democracies and young countries. So in many ways, we're all learning from each other, to be honest, both good and bad. Like we both are trying to get our best learnings and sometimes it may not serve us in the long run or sometimes it doesn't. May serve us in the long run, but I think so much of being in emerging markets is the challenges of being in democracies or countries with just younger infrastructure, younger public policy set up. And I think that's where the opportunities are. You can either say that's where all of the issues are, which are true, but where there are issues, there are also opportunities.

(04:38) Jeremy Au:

Yeah. And I think Nepal made sense because it's a neighbor to both India and China and India has already banned TikTok. So there's a regulatory precedence right for your neighbor. They're also part of that geopolitical dynamic that you're thinking about but I think it's going to be interesting because we will continue to see more regulatory concerns come up and I think it would be interesting to see how the ByteDance and TikTok team works really hard to manage that relationship with all the various countries but it's going to be a lot of countries to talk to simultaneously. So, fingers crossed as we figure out how consumers figure this out.

Well, I definitely have an interest in this because we have 40,000 followers on TikTok. So I'm like, well, will sure would be nice for TikTok to keep going, but you know, anyway. Because I think it's a very compelling consumption medium. It's just so many people just use TikTok.

(05:21) Gita Sjahrir:

Right, and I think you said it really well at the last episode, which is the importance of having a proactive strategy when it comes to public policy and in the countries that you're in, and so not just leaving it all to market mechanisms and the consumers, because in the end once a business gets big enough, and this is pretty much any business, anything that gets big enough will somehow touch with the public sector, so just to have a more proactive strategy to think about the different political levers, the different levers to power and just being able to navigate that well so that you're constantly balancing between what your consumers need from your product, but also what your regulators and the people from the public sector would also need to have comfort that your product is adding value to their society.

(06:11) Jeremy Au:

Yeah, I can imagine that this awareness is stronger, I think, across the first generation of social media platforms like Facebook and Google. They have huge teams. I think they know how to have those conversations. And I think the Chinese- founded companies are starting to learn. I think not only the how to do it, but also kind of like the cost and ramifications of what the investment looks like, so it will be interesting. I can imagine Temu and Shein and all these other folks are slowly writing down because all these lessons are highly relevant.

(06:38) Jeremy Au:

So speaking about all of this kind of like global dynamic one big one has been climate, right? A lot of regulatory action has been happening and I think there's a recent article about

climate funds on rushing to invest in Southeast Asia. This was an article by DealStreetAsia. So it talked about how Aera VC Derek Handley who was a previous guest of the podcast has raised $50M to target industrial decarbonization. We've also had other quotes here for Eversource Capital, Radical Fund, you know, from Alina also had announced the first close of its $40M vehicle also based on pulling capital from regional family offices. And then ADM Capital seems to be on the market to raise a $200 million Indonesia-focused climate fund called the Asia Climate Smart Landscape Fund, ACLF. So lots of different folks that seem to be looking at climate tech and Gita, I know that this is one of your passions. So happy to hear your first reaction and what you think..

(07:29) Gita Sjahrir:

I really want to give a shout out to your coverage of climate funds and also I really love a lot of the climate funds coming into the region right now because they're attacking the problem exactly where we need it, which is on a consumer basis. There are a lot of these climate funds now addressing things mainly from a consumer perspective or from things that are much more easily addressable and if there's one thing I love about this region is the fact that oftentimes when private sector and when individuals really take charge and we band together, it's actually enough to sway the public sector and legislators and although a lot of people can look at it as, oh, is your government just reactive? It's also nice to have a government that reacts and adapts to the wants and needs of not just citizens, but other players, other international players. And that, for me, is where I find a lot of the hope from these new climate players coming in and trying to address things from a consumer level.

I'm really glad that all this capital is starting to come into the region to address this issue because I guess I see the problem slightly differently, which is, yes, Indonesia is one of the largest emitters of greenhouse gases, but actually on a per capita basis, the developed nations are still the largest emitters per capita. This is on, again, per capita basis, and a lot of it is because developed nations have already used so much energy in order to get to that level of economic development that they are now, finding it hard to reduce their emissions and they have to find innovations or other type of solutions actually in other regions, right? So if you're seeing this movement, it's a lot in other emerging markets like Latin America, African continent. Now we're coming to Southeast Asia. Again, this is going to be very similar to what we've talked about in the past, which is a lot of these solutions right now, the focus is on consumer based changes that we can make. Why? Because you will come against the hardest challenge of all, which is regulation.

So, for example, if you're trying to go into nature based solutions or carbon credits, Indonesia right now still does not have a fully fleshed out and developed voluntary carbon market or international carbon market trading scheme. So we already have an Indonesia carbon exchange under IDX, under our stock exchange, but we don't have the mechanisms for, let's say, international sales under vCM , or we don't have international sales right now for, let's say ETS, but also, it's not fully fleshed out and you're going to see this in a lot of emerging markets. A lot of these places just won't have certain policies fully fleshed out for many reasons, and it's not as simple as, oh, why don't I come over to your country and give you by, you know, 10 years experience in carbon market because they will have other issues and values that they're thinking about in the process. So, for example, carbon markets are often fraught with questions of, "Is this just for the communities there? Are you actually funneling the money to the communities?" And some countries will take that very seriously, which is what are the safeguards in place so that the monies are actually flowing to the communities and to the indigenous peoples? What are we doing in order to create a more just and high integrity carbon project? And these are the questions that probably a lot of these emerging markets are learning as other emerging markets in the past have basically paid the price for not having all those safeguards in place.

And I think this is where again, lots of challenges, but also lots of opportunities lie because if you're looking for NBS, nature-based solutions, yes, that's emerging markets.

We have lots of that, and they need a lot of help. If you're looking, for example, for decarbonization technology. Yeah, maybe some of the more cost efficient places to do it will be emerging markets. If you're looking for, let's say, renewable energy deployment, yeah, maybe some parts of that will be emerging markets where we have even issues with infrastructure and grids, which means probably we can start over, but with a renewable energy as a baseline, if we can get the financing and the structure in place. So lots to think about.

(11:45) Jeremy Au:

Yeah, definitely lots to think about. Zooming out a little bit here is that, I remember 10 years ago, everybody was debating, should be a carbon tax or should it be a carbon markets? And it feels like very much settled, I think globally seems very much the market cap and trade very much seems to be approach for most folks. Okay. And I know that you've had a hand in helping think through some of the policy and design structures of that. How would you think about structuring that? What are some of the principles to doing so?

(12:12) Gita Sjahrir:

Again, when you're thinking of cap and trade, in the end, I think that's actually a behavioral economics question, which is what are the mechanisms and policies we can pass that will be a carrot and stick for companies, right? And as we know positive psychology always works better, so what works more as a carrot to make people change? And I think when it comes to this, Indonesia has taken some steps to be progressive on that front in order to push companies to become more responsible. The thing is also we are still, as a region, developing. For example, from an energy consumption, we won't match let's say, I don't know, you on a purpose and basis and we don't match, for example, the UK on an emissions per capita basis, but again, that's because we're still developing and I think it's really important to understand this as we think about energy transition cap and trade regulatory carrots and sticks that we give to private sector because in the end, if you're thinking even about the highest AUM like the highest net worth player in Southeast Asia, there's a really great chance they're still not on the same level as EU, UK, US, which just has a much larger depth of economy..

So I think that's why when people ask, hey, how come your carbon tax is not as high or how come it's still at that level? I think a lot of it also has to understand our limitations in terms of where our economy is. So if anything, I really challenge this view that all the change must be done in developing economies, because a lot of the framing of the situation is, Hey, developing economies, you still have time to do it. You still have the ability to do it because you're also not there yet. And I'm always like, wait, that makes no sense. If the developed markets have the higher emissions per capita, shouldn't it be? You know, they're the ones that are looking at the way they grow rather than just imposing their standards on developing markets. So that's my two cents.

(14:12) Jeremy Au:

I mean, when we say emissions per capita, what we also mean really is that fundamentally is this how much energy every person gets to consume and use, right? And there's no joke, I mean, the difference between having energy so that you can have the lights on for your kid to study, for a fridge, for your air conditioning, for your industrial and manufacturing. It's you can't have energy without some emissions currently right now in this current technology stack paradigm. So when we say oh, we want you to have less emissions per capita at some level, you know, I can squeeze some of the efficiency, but you're asking people to slow down their rate of growth of consumption, which is tough.

(14:46) Gita Sjahrir:

And also just to understand that we're in different stages of development, right? So sometimes I wonder why is it that emerging markets get so much of the focus on reducing our growth or reducing our consumption when in fact again, on a per capita basis, we're simply not as big as developed markets. So again, that is this bizarre way of looking at the situation where I really question a lot of this idea of energy transition being mainly emerging market issue because to be honest, like, when I read media and all of that, it's all about, oh, Indonesia's dependence on coal, Vietnam's dependence on this and all these other countries and how come no one really talks about other developed markets dependence on fossil fuels because they're also not at 90% renewable energy mix. It's not. No one is. So why are we getting so much of the pressure? And I think that is the one narrative that I push back a lot on, which, by the way, does not mean I never want to see energy transition. That's absolutely crazy and I think a lot of the shaping of the narrative has been this very binary view of things, which is, oh, if you're not into reducing your economic growth for the benefit of the environment, that means you want fossil fuels until the world ends, which is absolutely mental. So I think just being more mindful of the transition to energy and not making it just a purely global south issue.

(16:19) Jeremy Au:

It ties back to our earlier episode, two months ago, right? We talked about narratives and media narratives. And we also said we acknowledge that a lot of the global publications, the ones that we read and so forth, and even some of the global platforms, for example, like Twitter. They're very strong, American and even Europe kind of like centricity, which is understandable. They're based at headquarter there. And so they should represent an ethos. It's just that I think, that's great when they're analyzing news in the West, obviously, I think they have a point of view about the rest of the world from their perspective. And then from our perspective, it's just okay, like there's a fair point of view. And here's the local point of view, right? I think that's the tricky part that everyone's trying to figure out because, yeah, I think it's a very nuanced headline to be like, okay, Southeast Asia wants a double GDP per capita, and using the world's global technology stack, that's actually vaguely cost effective and politically acceptable. It's going to mean double emissions. And we're going to make sure it's not triple emissions, but, let's have that conversation. And then we're not going to say, and it will, it's also a political non starter to go to the, these countries that develop and say hey, why don't we hit the target by halving your emission per capita, which means halving your energy stack. It was also politically impossible, right? So I think there's that little bit of a horse trade we're trying to figure out and say nicely. It's just that in Southeast Asia you open up the newspaper, it's what were you reading, right? So I think that's interesting. I wouldn't say quandary, but I think, it's a framing narrative that you shared.

(17:35) Gita Sjahrir:

So for example, we had that recent news article on the new solar plant and there are all these upcoming renewable energy projects that is coming to light in Indonesia. And those are all positive, but also understand that we have other things that are challenging in the pipeline and I think just always being wary of what current challenges are there in the country today and why was it there in the first place. That would be very important for any player in mind. Not just going, "oh because you're having this solar energy power plant, therefore there's going to be so much more. I'm sure it's all going to be good. Really question what held it back for many years. What were the issues, for example, with grids? Have you thought about power grids? Do we have that infrastructure in the region you want? Is almost everything in Java, Bali? Hint, hint, yes. Is development costs right now higher than it should be? So just having all of that in mind and really questioning the origin and the source and not coming up with simplistic reasoning like, oh, it happened because one person is corrupt or it happened because Indonesia is a developing market and really questioning what are the interests that lies behind that root cause. Because there's a lot.

(18:51) Jeremy Au:

And I think what was interesting was that, mentioning about the solar plant, so let's just put some numbers here. It was said to be Southeast Asia's largest floating solar plant so 145 megawatts. It costs $143 million uh, for 340, 000 solar panel units across 24 hectares at the Serrata Dam in West Java. And it's going to generate 245 gigawatt hours, which is equivalent to 50, 000 households. How do you feel about this?

(19:17) Gita Sjahrir:

Yeah, like I said before these are all progress. But again there are challenges in building so many of these. For example, the really big question is baseline, which is when we think of baseline, it's the energy source that will keep going no matter what and it's the literal baseline of your electricity grid and if that's the case in Indonesia, by law, PLN, which is our national electricity company they are literally not allowed to raise the prices to a level that consumers cannot afford, as In the CEO of PLN can go to jail for that. And that's something that other countries, which has privatized electricity, probably don't know or don't understand, meaning that is why so much of the electricity cost has to be controlled somehow which so far has include a lot of fossil fuels because on a kilowatt hour calculation. Yeah, that's the most affordable so far, right?

And I think just understanding that it's not a privatized electricity provider and understanding that means a lot of the players, especially PLN, will be very much focused on how can I provide electricity so that it doesn't exceed a certain cost that the general consumer cannot afford, right? That's super important because I think in deeper economies, you can pass on the cost to consumers and their price sensitivity is going to be lower than a developing market where the GDP per capita is still only in the single thousands. So I think just being really aware of that and not necessarily assuming that means we can now have 50 solar plants opening every quarter because again, let alone the cost.

Next question will be, what about your grid? So right now, a lot of the electricity runs through Java, Bali grid, which, if you're thinking, does that mean it's Java and Bali? Yep, then begs the question, what happens to other regions that are not on that grid? How much do grids cost? That's another question. Who foots the bill, right? If PLN foots the bill, does that mean we have to pay more? So these are just very simple arithmetic, but with extremely sizable costs that people also need to be very wary of. So oftentimes, when we think of electricity, especially for people visiting Indonesia, they're usually, let's be real, only in Jakarta or Bali. So they really see only one side of development. For example, the GDP of Jakarta is nowhere near the GDP of the outer regions. Just being also mindful of that disparity and also what makes it an emerging market is that development is different in different parts and different regions. Also, it is a naturally decentralized country, meaning we're spread out over 17,000 islands. That is quite frankly, a logistical nightmare to create infrastructure. So again, being very wary of that and then also understanding actually we have too much electricity for Java, Bali, literally.

(22:19) Gita Sjahrir:

So eons ago, we simply signed too many PPAs for many reasons. And now, we have too much electricity coming from fossil fuels. And it's not that simple to turn off a power plant. Like to turn off a power plant, you literally need to pay people back because creditors and people who funded that power plant don't want you to just turn it off, right? Okay, so how much does it cost to early retire power plant? Hundreds of millions of dollars. So again, there's so many aspects to this that as much as I really love that there's progress that we're having this new floating solar power plant, I do know that the homework is going to be quite sizable. And I'm only understanding this now because 2 years ago, I joined the coordinating minister of maritime and investment affairs for their climate task force in which I was part of the just energy transition partnership the JETP program, which mobilized $20 billion to help Indonesia transition to zero emissions, electricity before 2060 and I would say, it required being there to really understand how deep the challenges were, how systemic and also how so much of it also are connected to geopolitics, to global macroeconomic swings and so I think when we're thinking of Energy transition and good progress in mind, understand this is a long game..

(23:41) Jeremy Au:

Yeah. Definitely a long game. And I think it's interesting because it's a developed country commitment to support that transition of $20 billion. And I think it's interesting because if you think about it chronologically, right now, renewable energy is about 15% of the total power generation capacity of over 80 gigawatts. And the goal is to get that to 23% by 2025 and then reach net zero emissions to 2060 to 2050. Hey, how old are we going to be? We're going to be a lot older by then, I just realized.

(24:08) Gita Sjahrir:

I'll be a bit older. Oh gosh, I hope I never retire.

(24:13) Jeremy Au:

Okay, well, we will have the opportunity to retire at that point. So, this will be an interesting, mark this down in our calendar events, and then in 40 years, and then we'll find out.

(24:22) Gita Sjahrir:

Going to Zoom you that day.

(24:23) Jeremy Au:

It would be a 3D VR headset zoom call. There we go. By then, our avatars will talk to each other on our behalf. There we go.

(24:31) Gita Sjahrir:

Right, right.

(24:31) Jeremy Au:

So that's going to be interesting set of dynamics to figure out. How do you think about that like deployment timeline? Is it like renewables? Is it, you think about grid? How do you think about where the investments are? Is it going to be all of it?

(24:42) Gita Sjahrir:

So unfortunately, because 2060 and this JETP funding is for anything below 2060. So it's actually supposed to be faster than 2060. I don't know. Does that mean 2055? Does that mean 2053? I'm not sure. But the idea is to mobilize it so that you reach it faster than what the government set out for it to be before, which was 2060. And the problem with that is, that's not long from now, by the way. I know all of us, we're just young at heart, and we think that we should do energy transition tomorrow. That's cool. But in reality, again, a lot of the issues are systemic. So again, the question is, do you put it to renewable energy? Well, that's nice and all, but remember, we still have all these coal fired power plants that are under contract that we need to early retire. So early retirement costs hundreds of millions of dollars. It takes a long time. It requires a lot of negotiations because again, It is not great to sign a contract with a country for a power plant and that country pulls the plug because who's to say that country will not pull the plug on, let's say a solar power plant or any other things. And that's why, in order to continue to be high integrity, countries manage early retirement of plants very carefully, like that's not something where you just pull a plug. That's not something you just cancel the PPA and go, Hey, sorry, force majeure. That's not a thing.

Countries can lose their credit rating and so much more if that happens. So again, early retirement needs to be done and there's lots of plans to early retire. And then again, grids are infrastructure project and just like any other infrastructure project, it takes a really long time and so much money and then if you're going to build all that grid and you're going to say that, Hey, let's have renewable energy as the baseline. Okay, like what type of grid would that be? What kind of grid is that? How much would that be? Would it add to the cost? Now, during that time, during all of these things that we're investing into, remember, the price of electricity cannot go up.

(26:47) Jeremy Au:


(26:48) Gita Sjahrir:

So, these are all the factors that we are thinking and that we are keeping in mind, which is why the cost of any energy transition program will be very large, like in the hundreds of billions because of exactly this, because there are so many levers. There are so many issues and also there were development actions that were taken circa 30,40 years ago that we simply didn't foresee.

There are negative externalities to any action that we have. And as smart as people are, because of how quickly, technology develops, you're simply unable to see how some of these negative externalities come to mind.

For example, we also don't know, will there be negative externalities for some of the current transitions that we're doing circa, I don't know, come 2070, right? And I think just being mindful of that and being very aware of the limitations of how well we can predict our externality is moving forward. So we plan for the absolute worst, but also always be mindful that we will have blind spots. The spending we're gonna have to spend a ton without changing our electricity price and that's why this requires multiple countries to help because the fact is no country today can really truly stand alone and do really well and thrive. The fact is we're all in each other's business. We're all exporting, importing to each other. We're all experiencing migrations of people. We're all experiencing all these global movements because that's just the reality of constantly developing economies. And also just the way the world works, that's humanity. The more humanity develops and improves, the more we're all going to keep seeing, meeting each other, working together with each other. So that is why I'm also very pro working together with other countries to help energy transition agendas work in multiple countries. So not just emerging markets.

(28:42) Jeremy Au:

Yeah. Talking about other countries, that reminded me, for example, a big part of renewable transition is using solar cells, right, which is distributable. And at some level, it's cheaper than a lot of the oil and gas deployments is by just infrastructure spend. But more importantly as well, actually is a huge dependence on the Chinese solar cell industry, which it used to be the German solar cell industry, but now, the Chinese figure out how to industrialize and scale that up and kudos to them because without them scaling up and then doing all the industrial policy to make it happen, we wouldn't have cheap solar cells that make it affordable. But the truth is, if we believe that there's a U. S. China conflict, then, the truth is that supply of solar cells is at risk, right? And so, you want to build more solar cells, but then there's a spike tail risk of the supply being cut off, right? And then we don't really have a low cost alternative anywhere.

And then I like what you said about time frame. It's not easy to set up a power plant or decommission a power plant. It's just bonkers and you're spending billions of dollars. And if you don't get it right, and then you have all these tail risks and everything. It reminds me, I was just watching this documentary about the South Africa energy crisis that they have, and long story short is they're having brownouts and blackouts because people know it's a problem now, but, if you have chronic underinvestment and for whatever set of reasons, then you end up in a situation where the worst scenario is not higher prices for electricity, it just means you don't have enough electricity and then everything goes to crap after that because, if people can't travel, people can't use their internet, people can't coordinate, people can't manufacture, then you have economic crisis, you have a political accountability crisis, your society crisis, so lots of different angles. So I think people forget that the worst case scenario is not a higher price or net emission. It's just there's a really negative set of circumstances that can pop out.

(30:20) Gita Sjahrir:

I really love that you brought that up. So I'm married. I'm married to a South African. In fact, I'm wearing a wrap that I got from South Africa and South Africa means a lot to me, right? Like I have in laws there, I have family there. And people don't understand that it's not as simple as, Oh, why don't you just spend 10 cents more per kilowatt hour? The real cause is that people literally don't lead their lives. So, the worst case scenario isn't just paying, quote unquote, just 10 cents per kilowatt hours because oftentimes, due to so much inefficiency, it will not be 10 cents. It will be something else that, yes, a person making 400 a month probably can't afford. And in the case of South Africa, we are looking at people who physically can't lead their lives. You cannot run your small business, you cannot, have services in your stores, because you have brownouts and blackouts every day for hours, and that will affect your economic growth. That will affect your GDP per capita, that will affect so many things.

And, if you're looking at it from a human perspective, that's just people not being able to do basic stuff like going to school and cooking, and living, and I think that is the big cost in places that are developing, in emerging markets. The cost is just sometimes so much heavier than I guess people can think if they've only seen developed economies and have only Lived in developed economies, like when people go for a one week vacation in Bali, again, you're looking at only one part of development in Indonesia. Ritz Carlton in Bali is not representative of other parts of Indonesia. So being very mindful of that disparity and just being very mindful of how big the cost can be for a typical person living in an emerging market.

(32:11) Jeremy Au:

On that note, I'd love to kind of paraphrase the three big takeaways from this conversation. you know, wave off climate investment and venture capital across Southeast Asia. So we mentioned a few folks Aera, Derek Handley Radical Fund, Alina, in terms of what is the capital they're investing and why they're interested in developing markets and helping us with energy investments.

The second, of course, is I think there was a very fascinating deep dive about why the actual mechanics of what this efficiency and infrastructure build up looks like all the way from renewables to solar cells to new technologies to grid investments. I think there was an interesting dynamic where at the end of the day, it's a very large macro political, societal trade off. And we discussed some of that, the mechanics, principles of building cap and trade, positive behavior economics, respecting contracts. These are all different aspects that I think are underappreciated.

Lastly, thanks so much for sharing, what we talked to some extent, which is that global context. So we talked about how the global south or developing economies versus developed economies is a contrast in the incentives, but also where we are in terms of emissions per capita, energy consumption per capita, GDP per capita, which are all correlated to some extent. And we talk about the trade offs, the narratives, but also, set in a context of China and South Africa as well. So, thank you so much for sharing Gita.

(33:30) Gita Sjahrir: