US President Joe Biden at the G20 Summit in Bali, Tuesday, announced that the US and other parties are seeking to mobilize funds of up to US$20 billion to assist various energy transition projects in Indonesia.
The Largest Single Climate Finance Deal to Date
According to senior US Treasury officials, this is the largest single climate finance deal to date.
The funding comes from the Just Energy Transition Partnership (JEPT) scheme. This scheme is intended to help developing countries reduce their dependence on fossil fuels such as coal. Thus, carbon emissions that exacerbate climate change can be reduced.
“We hope to mobilize funds of US$20 billion to support Indonesia’s efforts to reduce emissions, develop new and renewable energy networks, and assist workers affected by the policy of closing coal-based power plants (PLTU),” Biden said.
This was said while Biden delivered his remarks at the Partnership for Global Infrastructure and Investment (PGII) meeting which was attended by Indonesian President Joko Widodo and European Commission President Ursula Von Der Leyen.
Biden assesses that this support can accelerate the energy transition in Indonesia, one of which is through early retirement of coal-based power plants.
The cooperation in aid of US$20 billion was finally announced directly by Joe Biden after the US, Japan, several partners from international funding institutions and the private sector through various meetings and negotiations for more than 1 year.
Indonesia to Reduce Carbon Emission to 290 Megatons by 2030
Source: JawaPos
From this cooperation, Indonesia was asked to reduce carbon emissions from the energy sector to 290 megatons by 2030. For Indonesia, the disbursement of funds can help the net zero emission target which is expected to be realized in 2060.
Under the agreement, the electricity sector’s net-zero target will be raised to 2050. Indonesian state-owned energy company Perusahaan Listrik Negara (PLN) has also set a goal of doubling the share of renewable energy in its energy mix by 2025.
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Indonesia Officially Launched The Energy Transition Mechanism (ETM) Country Platform
On the other hand, the Indonesian government has also officially launched the Energy Transition Mechanism (ETM) Country Platform in Bali, Monday, November 14, 2022, as part of a financing mechanism that can accelerate the energy transition, one of which is through early retirement of coal-based steam power plants.
Sri Mulyani, The Minister of Finance of the Republic of Indonesia, at the launch event said that the Country Platform’s Energy Transition Mechanism (ETM) is a form of Indonesia’s readiness, especially in terms of institutions and regulations in collecting investment for the energy transition.
“Indonesia’s Country Platform Energy Transition Mechanism will be a tool to raise investment from the private and public sectors, including mobilizing finance for climate action. And we hope that (ETM Country Platform) can convince the international community that we have a credible platform (to raise energy transition investments),” Sri Mulyani said while giving a speech at the launch event.
ETM Country Platform Had Allocated US$500 Million
In the same speech, Sri Mulyani said a few weeks ago Indonesia through the ETM Country Platform had allocated US$500 million in concession funds so that it is expected to attract investment of up to US$4 billion to accelerate the early retirement of several coal power plants with a total capacity of 2 Gigawatts.
“The plan can reduce 50 million tons of carbon emissions in 2030 or 160 million tons of carbon emissions in 2040,” said Sri Mulyani.
