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Indonesia is gearing up to unveil its $20 billion energy transition investment plan next month, as the nation strives to address funding challenges and determine the energy mix for this transformative initiative, according to a Reuters report.
This development comes just ahead of the United Nations COP28 climate summit, underlining Indonesia's commitment to environmental sustainability.
Originally scheduled for a mid-August launch, the Just Energy Transition Partnership (JETP) project faced delays due to various issues, ranging from disagreements over funding specifics to concerns regarding Indonesia's heavy reliance on coal for electricity generation.
The new timeline calls for public feedback on November 1, with an official launch ceremony anticipated around November 20. Paul Butarbutar, Deputy Secretary of Indonesia's JETP office, provided these details during a press briefing.
Responding to inquiries about the International Partners Group (IPG), which includes countries like the United States, Japan, as well as development banks and private lenders, and their alignment with the investment plan, Butarbutar said the country is going to agree on the content first, while funding and etcetera are a different matter for later discussion.
Under the JETP agreement, Indonesia has committed to capping and peaking carbon emissions from the power sector at 290 million tonnes by 2030. The IPG, in return, has pledged to provide financial support through a mix of equity investments, grants, and concessional loans.
Indonesian officials have expressed concerns about the reluctance of Western nations to finance the early retirement of coal-fired power plants, which is essential for facilitating the transition to renewable energy sources. Currently, more than half of Indonesia's electricity capacity, as the world's largest exporter of thermal coal, relies on coal.
Finance Minister Sri Mulyani Indrawati has also advocated for an increased allocation of grants in the fund to reduce interest rates.
A member of the JETP technical working group previously explained that the August delay was necessitated by the need to ensure that proposals account for additional coal power plant capacity being built off-grid by industrial firms, including nickel smelters.
(Writing by Alex Guo Editing by Emma Yang)
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