Indonesia's Just Energy Transition Partnership Investment Plan Launched
The International Partners Group (IPG) have welcomed the launch of Indonesia’s Just Energy Transition Partnership (JETP) Comprehensive Investment Plan.
IDXChannel - The International Partners Group (IPG) have welcomed the launch of Indonesia’s Just Energy Transition Partnership (JETP) Comprehensive Investment and Policy Plan (CIPP).
The group is co-led by the United States (US) and Japan and comprised of Canada, Denmark, the European Union (EU), Germany, France, Norway, Italy, and the United Kingdom (UK).
Launched in Jakarta on Tuesday (21/11/2023), the CIPP is a roadmap for the government of Indonesia and the IPG to achieve the objectives laid out in the JETP Joint Statement, announced at the G20 Leaders’ Summit last year in Bali. Under the Joint Statement, Indonesia committed to limit emissions, accelerate renewable energy development, and set a goal to achieve net zero emissions in the power sector by 2050. To support these ambitious targets, the IPG committed to mobilize USD10 billion in financing and the Glasgow Financial Alliance for Net Zero (GFANZ), a global coalition of leading financial institutions committed to accelerating the net-zero transition, committed to mobilizing and facilitating another USD10 billion in financing.
The culmination of a year’s worth of work, the CIPP maps out a technical pathway for Indonesia’s power sector, recommends policy changes needed to successfully transition the power sector, and outlines a just transition plan. It also serves as the basis to drive the USD20 billion in JETP financing toward specific projects and priorities for Indonesia’s energy transition.
The CIPP technical pathway focuses initially on Indonesia’s on-grid power sector. Under the CIPP technical pathway for the on-grid system, Indonesia’s on-grid system will emit no more than 250 MT CO2, down from a baseline of 305 MT, and will achieve 44% renewable energy generation share by 2030. The partnership will work together to complete an analysis of Indonesia’s off-grid power sector in the coming months. This analysis will serve as the basis for implementing the necessary measures to achieve a comprehensive energy transition.
The USD20 billion funding package will be disbursed through various mechanisms, including via grants, concessional and non-concessional loans, and investments, and guarantees. The IPG's funding will direct support toward the priorities and projects identified in the CIPP, including renewable energy deployment; transmission and grid build out; managed phaseout and reduction in emissions from coal plants; and just transition initiatives.
"Japan welcomes the release of the Comprehensive Investment and Policy Plan, which shows an ambitious pathway towards the net zero. The Just Energy Transition Partnership will promote Indonesia's clean energy and economic development, which will also contribute to more sustainable, more prosperous and inclusive global economies and societies. Japan will continue to co-lead this JETP with the U.S., in coordination with the other partner countries, to support Indonesia's realistic but ambitious decarbonization transition, while respecting Indonesia's country ownership. Japan will continue to contribute to global decarbonization efforts through various initiatives including JETP," Kanasugi Kenji, Ambassador of Japan to Indonesia said in a media release.
As next steps, the Indonesian government and the IPG, supported by the JETP Secretariat, will continue to work together to implement the CIPP. The IPG and GFANZ investors are actively working to direct financing towards potential JETP projects, and Indonesia’s implementation of the CIPP’s policy recommendations will enable the business environment for renewable investments. These combined efforts are designed to help catalyze additional investments in Indonesia’s energy transition and spark a boom in Indonesia’s renewable energy sector.
“Indonesia’s roadmap to reducing carbon emissions – the Indonesia JETP Comprehensive Investment and Policy Plan – is an important milestone demonstrating Indonesia’s leadership towards reaching net zero in the power sector by 2050 and promoting economic growth powered by renewable energy," Michael F. Kleine, Chargé d’Affaires, Embassy of the US to Indonesia said. (WHY)