Strengthening the Role of Sharia Banking in Financing Solar Power Plants to Support Sustainable Development in Indonesia
Abstract
The reluctance of Islamic banking to participate in financing solar power plants is primarily due to higher risk and lower economic value than fossil-based energy. This study proposes a risk management guidance and financing model to strengthen the role of Sharia Banking in financing solar power plants and support sustainable development in Indonesia. There is a significant gap in the study of risk management and the Syariah financing model for solar power plants. We used a qualitative method that involved expert consultations and literature studies to identify the risks of solar power plants. We also derived an equity-based Diminishing Musyarakah for the Sharia financing model. Me study's result is a risk management framework and a Sharia financing scheme for solar power plants. By using this framework Sharia banks can increase their participation in supporting sustainable development.
Keywords
References
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