President of Indonesia Joko Widodo, President of the European Commission Ursula von der Leyen on behalf of the EU, and leaders of the International Partners Group (IPG), co-led by the United States and Japan, and including Canada, Denmark, France, Germany, Italy, Norway, and the United Kingdom, launched a Just Energy Transition Partnership with Indonesia during the Partnership for Global Infrastructure and Investment (PGII) event at the G20 Summit, taking place on 15-16 November 2022 in Bali.

In a Joint Statement, Indonesia and International Partners announced the commitment to groundbreaking climate targets and associated financing to support the Asian country in an ambitious and just energy transition, consistent with the Paris Agreement goals and contributing to keep 1.5 °C global warming limit within reach.

It includes an accelerated power sector emissions reduction pathway to net zero by 2050 and a strategy based on the expansion of renewable energies, the phase down of on and off-grid coal-fired electricity generation, and further commitments to regulatory reforms and energy efficiency.

President of the European Commission, Ursula von der Leyen said, “The Just Energy Transition Partnership for Indonesia will chart a roadmap to a greener, cleaner future in the country – and a future full of opportunities for the Indonesian people. They will be the ones reaping the benefits of the transformation of their economy, as Indonesia becomes a renewables hub.”

The EU together with international partners will back Indonesia in its endeavours to develop an investment plan that will put them in the right path to achieve significant new climate targets and policies to reduce greenhouse gas emissions and support those impacted communities along the process. The implementation of concrete actions achieving a just energy transition for workers and communities, particularly those most affected by an energy transition away from coal is an essential aspect in this Partnership.

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Hand in hand, Indonesia, the EU and partners will work together over the next six months to build up that concrete plan for investments, financing, and technical assistance.

Overall, the aim of this long-term partnership with Indonesia is to mobilise an initial $20 billion (€19.4 billion approximately) in public and private financing over a three-to-five-year period, using a mix of grants, concessional loans, market-rate loans, guarantees, and private investments. This will pave the way to achieving the future ambitious climate and energy targets.

Half of this sum, $10 billion, will be mobilised by the IPG members. The EU and Member States which are part of the IPG intend to mobilise around $2.5 billion. From this amount, the EU will support the Partnership via the European Investment Bank (EIB) with €1 billion to support eligible projects that contribute to the decarbonisation of Indonesia’s power system through the development and integration of renewable energy. In addition, the EU will earmark 25 million in grants and technical assistance.

Source: EU Commission