Indonesia will be supported by $20bn of public and private finance to be mobilised by the US, Japan, and other countries to help it make the transition from coal to renewable alternatives and work towards achieving carbon neutrality in the power sector by 2050.
An announcement in this regard was made during the ongoing G20 Summit in Bali, Indonesia.
Alongside the US and Japan, Canada, Denmark, the European Union, Germany, France, Norway, Italy, and the UK formed a Just Energy Transition Partnership (JETP) developed with Indonesia.
Indonesia has agreed to work with the backing of its international partners for developing an investment plan to meet significant new goals and policies for lowering emissions of greenhouse gases (GHG).
The country under the Indonesia Just Energy Transition Partnership will aim at achieving peaking total power sector emissions by the end of this decade.
Indonesia has committed to limit power sector emissions to 290 megatons of CO2 in 2030 and will advance its net zero power sector emissions goal by 10 years to 2050.
The country will also expedite the installation of renewable energy so that the power generated by it makes up no less than 34% of all power produced by 2030.
Indonesian President Joko Widodo said: “Indonesia is committed to using our energy transition to achieve a green economy and drive sustainable development. We are grateful for the cooperation and the support from our international partners to realise its full implementation that will accelerate this transition.
“This partnership will generate valuable lessons for the global community and can be replicated in other countries to help meet our shared climate goals through concrete collaborative actions.”
According to The White House, the Just Energy Transition Partnership will mobilise the funding of private financing over a period of three to five years. This will be through a combination of grants, market-rate loans, guarantees, concessional loans, and private investments.
Commitments from the public sector will make up $10bn. The remaining amount will be from private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ), including Bank of America, Deutsche Bank, Citi, HSBC, MUFG, Macquarie, and Standard Chartered.
US President Joe Biden said: “Indonesia has shown tremendous leadership and ambition throughout the development of this partnership.
“The resulting new and accelerated targets demonstrate how countries can dramatically cut emissions and increase renewable energy while advancing a commitment to creating quality jobs and protecting livelihoods and communities.”
