Jakarta, 2 August 2023 – During the G20 Summit in November 2022, Indonesia received a Just Energy Transition Partnership (JETP) funding commitment from International Partners Group (IPG) countries in the amount of USD 20 billion. JETP is a cooperation mechanism for climate finance, and Indonesia is the second country to receive this funding commitment after South Africa.
Indonesia is required to draw up a Comprehensive Investment Policy Plan (CIPP) and complete it on August 16, 2023. The scope of areas that can be included in JETP funding is the electricity sector including power plants owned by PLN as well as the private sector.
Described by Deon Arinaldo, Energy Transformation Program Manager, Institute for Essential Services Reform (IESR) in the webinar “JETP Energy Transition: What and How Does It Work?” organized by AJI (Independent Journalist Association) Jakarta, that this JETP momentum is an opportunity to accelerate the energy transition and policy reform, particularly in the electricity sector.
“One of the expected outputs is a comprehensive investment plan and policy document. This document should be used as a guide for the energy transition roadmap in Indonesia,” explained Deon.
Deon also added that the JETP agreement included discussions on the development of the renewable energy industry and aspects of sustainability. The sustainability aspect is one of the important components in this partnership as well as an aspect that takes time to design because it is hoped that this sustainability aspect can mitigate the negative impacts that arise on communities affected by the energy transition.
Deon continued, to achieve the electricity sector emission reduction target agreed in JETP, which is a maximum of 290 million tons of CO2 in 2030, Indonesia needs to cut coal power plant capacity by 8.6 GW before 2030.
Ahmad Ashov Birry, Program Director for Trend Asia, stressed the importance of paying attention to the sustainability aspects of the Just Energy Transition Partnership scheme.
“It is important not to treat JETP with a project approach, but with a policy approach so that it has strong legal binding,” added Ashov.
Ashov assessed that although JETP is currently subject to Presidential Regulation 112/2022, it is still not strong enough because Presidential Decree 112/2022 itself has not yet sent a strong signal to stop coal operations.
The Bersihkan Indonesia Coalition formulates guidelines on aspects of justice for JETP including ensuring that the investment plan preparation process is accountable, transparent, participatory, fulfills human rights, is ecologically & economically just, and transformative.