International Partners Secure $20 Billion Fund for Indonesia’s Green Ambitions

International Partners Secure $20 Billion Fund for Indonesia’s Green Ambitions

/ Policy & Regulations / Tuesday, 15 November 2022 13:53

In an effort to chart a roadmap to a greener, cleaner future for Indonesia, a coalition of countries led by the US, Japan and partners will mobilize $20 billion of public and private finance to help the country’s transition from coal to renewable alternatives.

The Just Energy Transition Partnership (JETP), launched during the G20 summit, is a landmark partnership that pursues an ambitious and just power sector transition in Indonesia, supporting a trajectory consistent with keeping the 1.5C global warming limit within reach, the White House said in a statement.

Indonesia will work alongside the international partners to develop an investment plan for substantial new targets and policies aimed at reducing GHG emissions.

Under the program, Indonesia will cap power sector emissions at 290 megatons of CO2 in 2030 and attempt to achieve net-zero emissions in the sector by 2050. It will seek to accelerate the deployment of renewable energy generation, comprising at least 34% of all power generation by 2030, which would roughly double the total renewables deployment over the course of this decade compared to current plans.   Also read: How Gap in Copper Supply Could Impede Energy Transition Drive

The public and private financing, which will last for three to five years, will use a combination of grants, concessional loans, market-rate loans, guarantees and private investments to help Indonesia achieve its decarbonization targets. Contributions to the JETP include $10 billion in public sector pledges and a commitment to work to mobilize and facilitate $10 billion in private investment from an initial set of private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ).

"We’ve built a platform for cooperation that can truly transform Indonesia’s power sector from coal to renewables and support significant economic growth," US Special Envoy on Climate Change John Kerry said. "We've wrestled with countless issues to arrive at today’s groundbreaking announcement," he added.

Meanwhile, Indonesian President Joko Widodo said, “Indonesia is committed to using our energy transition to achieve a green economy and drive sustainable development. We are grateful for the cooperation and the support from our international partners to realize its full implementation, that will accelerate this transition. This partnership will generate valuable lessons for the global community and can be replicated in other countries to help meet our shared climate goals through concrete collaborative actions.”

The United States and Japan are co-leading the effort with Indonesia on behalf of the other G7 democracies: Britain, Canada, France, Germany and Italy, as well as partners Norway, Denmark and the European Union.  Also read: Renewables vs. Hydrocarbons: The Devil Is in the Details

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