President Joko Widodo (Jokowi) and the leaders of the United States (US) and Japan launched the Just Energy Transition (JETP) partnership, worth around US$20 billion, to accelerate the country’s energy transition.
The funds will be sourced from the public and private sectors for three to five years. It can also be combined with grants, concessional loans, market-rate loans, guarantees, and private investment.
In ratio, US$10 billion will come from the public sector. At the same time, the rest will be disbursed from a series of private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero. That includes Citi, Deutsche Bank, HSBC, Bank of America, Macquarie, MUFG, and Standard Chartered.
The US, Japan, and the member countries of the International Partners Group – the G7 plus Denmark and Norway – are also involved in this cooperation.
“We jointly mobilized tens of billions in developing EBT and supporting the transition away from coal,” said Joe Biden while attending the G20 Indonesia in Nusa Dua Tuesday (15/11).
The next step of the JETP partnership
Furthermore, the parties involved will work together over the next six months to develop concrete plans for investment, financing, and technical assstance because the target is ambitious.
By 2030, the partnership is expected to be able to shift the peaking date of Indonesia’s electricity sector by up to 7 years, which can reduce 300 megatons of greenhouse emissions cumulatively. It could even reduce it by two gigatonnes of CO2 by 2060.
Jokowi said, “Indonesia is committed to using the energy transition to achieve a green economy and promote sustainable development.”
According to the Coordinating Minister for Maritime Affairs and Investment (Menko Marvel), Luhut Binsar Pandjaitan, Indonesia will prepare the partnership action plan to produce a comprehensive investment plan.
Commitment to reduce emissions in JETP
In JETP, several initial steps have been formulated to reduce GHG emissions slowly. What are the initiations?
- We are shifting the projected peak emissions of the electricity sector in 2030.
- We are limiting the electricity sector’s emissions to 290 megatonnes of CO2 in 2030, which is lower than the base value of 357 MT CO2.
- The electricity industry should aim to have net zero emissions by 2050.
- The net-zero emission target in the electricity sector has been brought forward over the next ten years.
- Accelerate the spread of renewable energy, so EBT power plants reach at least 34 percent of all power plants by 2030.
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