He explained that the Indonesian government has been preparing acceleration programs for energy transition, including plans to shut down several coal-fired power plants, with funding from the JETP. However, the promised funds have not yet been made available.
The JETP energy transition fund for Indonesia consists of $10 billion in public funds from members of the International Partner Group (IPG): the United States, the United Kingdom, Canada, Germany, France, Italy, Japan, Norway, Denmark, and the European Union.
The remaining $10 billion comes from seven international financial institutions that are part of the Glasgow Financial Alliance for Net Zero (GFANZ): HSBC, Citibank, Standard Chartered, Bank of America, Deutsche Bank, MUFG, and Macquarie.
The energy transition fund can take the form of grants and loans, both concessional and blended finance, which is a scheme where commercial funding is combined with other types of financing to achieve lower interest rates and reduced capital costs.
The promised energy transition fund is outlined in a joint statement signed by the Indonesian government and the IPG. Therefore, the objectives stated in the joint statement become shared targets, which are conditional targets dependent on the availability of international support.
The main target is to reduce carbon emissions in Indonesia's electricity sector by 290 million tons of CO₂ by 2030 from a baseline of around 357 million tons of CO₂.
Related news: DPR supports blended finance to expedite energy transition
Related news: Indonesia pushes ASEAN collaboration on energy transition
Translator: Bayu Saputra, Tegar Nurfitra
Editor: Anton Santoso
Copyright © ANTARA 2023
