Intl group led by US, Japan to help Indonesia raise USD 20bn for energy transition
Indonesian President Joko Widodo, on the right, and EC President Ursula von der Leyen at the G20 Summit in Bali. Source: European Commission (www.ec.europa.eu).
November 15 (Renewables Now) - The government of Indonesia and a group of international partners that includes the European Union (EU) are uniting to help the archipelagic state raise at least USD 20 billion (EUR 19.38bn) under a newly-announced Just Energy Transition Partnership (JETP).
Indonesia will pursue an accelerated and ambitious just energy transition with the goal of achieving net zero emissions in the power sector by 2050, according to a joint statement on Tuesday.
The partnership was launched at the G20 Summit, currently taking place in Bali. The group of international partners consists of the governments of Japan, the US, Canada, Denmark, the EU, France, Germany, Italy, Norway, and the UK.
Over the next six months, Indonesia and this group will work together to establish a concrete plan for investments, financing and technical assistance, and eventually mobilise the aforementioned sum over a three-to-five-year period in the form of grants, concessional and market-rate loans, guarantees, and private investments. The international partner group has committed to raising half of the total amount, with EU members alone expected to contribute some USD 2.5 billion. In particular, the European Investment Bank (EIB) is to provide EUR 1 billion to support the decarbonisation of Indonesia's power system through the development and integration of renewable energy.
The targets that will be set in the yet-to-be-developed comprehensive investment plan include speeding up local renewables deployment so as to increase the renewable power share in the country to at least 34% by 2030, accelerating the development of a competitive domestic renewables and energy efficiency industry, stepping up the early-retirement of coal-fired power plants and freezing the existing pipeline of coal plant projects.
“The Just Energy Transition Partnership for Indonesia will chart a roadmap to a greener, cleaner future in the country – and a future full of opportunities for the Indonesian people. They will be the ones reaping the benefits of the transformation of their economy, as Indonesia becomes a renewables hub,” commented Ursula von der Leyen, President of the European Commission.