Wednesday, February 1 2023 Sign In   |    Register

News Quick Search



Front Page
Power News
Today's News
Yesterday's News
Week of Jan 30
Week of Jan 23
Week of Jan 16
Week of Jan 09
Week of Jan 02
By Topic
By News Partner
Gas News
News Customization


Pro Plus(+)

Add on products to your professional subscription.
  • Energy Archive News

    Home > News > Power News > News Article

    Share by Email E-mail Printer Friendly Print

    Rich nations, banks pledge $20bn for Indonesia’s coal-to-clean switch

    November 15, 2022 - Climate Home


      A group of rich nations and banks plan to invest $20 billion in speeding up Indonesia’s transition from coal to clean energy.

      Japan and the US coordinated financial contributions from seven other national governments and the EU, as well as private sector partners.

      The money will be spent retiring some of Indonesia’s huge, young fleet of coal-fired power stations and installing renewable energy to meet the country’s electricity demand instead.

      Indonesian minister Luhut Pandjaitan announced the “just energy transition partnership” (JETP) on the sidelines of a G20 leaders summit in Bali on Tuesday.

      It is a “groundbreaking model of international cooperation,” Pandjaitan told media, which would fulfill a promise to his granddaughter to “make policy that would benefit future generations”.

      Fabby Tumiwa is director of the Institute for Essential Services Reform (IESR) and advised the Indonesian government on the deal. It “could help Indonesia to meet its net zero emissions goal by 2060 or sooner,” he said. “As one of the largest emitters, this means a lot to global climate efforts to limit warming to 1.5C.”

      Biden and Xi unshackle Cop27 climate teams to formalise talks

      Indonesia will aim to peak emissions from its power sector by 2030 rather than the previous target of 2037. It has raised its 2030 target for the renewable share of electricity generation from 17% to 34%.

      The government will “freeze the existing pipeline” of coal-fired power plants. Those already under construction are expected to be completed, but others in early stages of development will not go ahead.

      Mafalda Duarte heads the Climate Investment Funds, which supported the deal. She told Climate Home: “If we were to allow these [already operating] plants to continue their economic life, then certainly we are out of this Paris Agreement goals of 1.5[C] and even more so if they continued to develop them.”

      Financial terms unclear

      Roughly half the $20bn package is to come from governments: the US, Japan, UK, Canada, Denmark, the EU, Germany, France, Norway and Italy. Banks are mobilising the rest.

      The joint statement between Indonesia and its partners did not reveal who was contributing what, or on what terms. It said the package includes grants, loans at both concessional and commercial rates, guarantees and technical assistance.

      Gas is casting a long shadow over green development in Africa

      The partners will continue talks on the financial terms and investment plan in the next three months.

      The share of grants, as opposed to loans, is a point of contention – as with a similar deal in South Africa. In June, Tumiwa told Climate Home: “The government expects to have grants. It doesn’t really want to have a loan – for sure.”

      Esther Tamara, from the Foreign Policy Community of Indonesia, told Climate Home: “Any financing is good news at this point. I am just wondering what kind of financing the JETP will be.”

      She said that South Africa’s JETP “was much lauded at first but then not so much afterwards”. In both, there was “no transparency, little room for civil societies to contribute,” she added.

      ‘Oil and gas trade show’ promotes carbon capture at Cop27

      As of July 2022, Indonesia had 19GW of new coal capacity under construction and 7GW in planning stages, according to data compiled by Global Energy Monitor.

      The partnership agreement states that support is “contingent on no new coal power capacity for instances where timely, zero-emissions, affordable, and reliable alternatives are available”.

      The $20bn is due to be invested in the next three to five years. IESR estimates the total cost of Indonesia’s energy transition at $1.2 trillion – 60 times what’s on offer here. Duarte told Climate Home “this is a first move – a first package of support and more will be needed”.

      The post Rich nations, banks pledge $20bn for Indonesia’s coal-to-clean switch appeared first on Climate Home News.

      The views expressed in content distributed by Newstex and its re-distributors (collectively, "Newstex Authoritative Content") are solely those of the respective author(s) and not necessarily the views of Newstex et al. It is provided as general information only on an "AS IS" basis, without warranties and conferring no rights, which should not be relied upon as professional advice. Newstex et al. make no claims, promises or guarantees regarding its accuracy or completeness, nor as to the quality of the opinions and commentary contained therein.


    Other Articles - International


       Home  -  Feedback  -  Contact Us  -  Safe Sender  -  About Energy Central   
    Copyright © 1996-2023 by CyberTech, Inc. All rights reserved.
    Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.