Jakarta, October 18, 2023 – President of the Republic of Indonesia (RI) Joko Widodo (Jokowi) in his speech at the opening ceremony of the 3rd Summit of the Belt Road Forum (BRF) at the Great Hall of the People, Beijing, emphasized that the synergy of the belt and road initiative (BRI) needs to be strengthened in conjunction with the industry’s decade of development. In his speech, the President mentioned that the BRI should be based on equal and mutually beneficial partnerships, transparent funding systems, utilization of local labor, and domestic products. President Jokowi also plans to coordinate the development of a new capital city, energy transition, and downstream industries as part of the BRI cooperation.
Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), also attended the event, said that the Chinese and Indonesian governments must emphasize their renewable energy development commitments to accelerate the energy transition through the Belt and Road Cooperation framework. These commitments should be outlined in medium- and long-term strategies and programs to attract additional technological support and funding for the energy transition.
“Indonesia’s energy transition requires funding of USD 100 billion by 2030 and USD 1 trillion by 2060. This involves building 35 to 40 GW of renewable energy capacity, shutting down 9 GW of existing power plants, and constructing thousands of kilometers of transmission lines, interconnections, and energy storage facilities by 2030. Therefore, the cooperation between Indonesia and China towards energy transition should primarily focus on achieving these targets. Another crucial area of focus should be greening the mineral extraction process within Indonesia’s downstream program, which involves several Chinese businesses. A comprehensive program covering these aspects would be highly appreciated,” Fabby said.
During the third BRI, IESR was invited by the Ministry of Ecology and Environment of the People’s Republic of China to support the launch of the Green Investment and Finance Partnership (GIFB) together with the Hong Kong Government, China National Development Bank, Sino Hydro Corporation, China International Capital Corp and Children’s Investment Fund Foundation. GIFP is a collaborative initiative to establish a project planning facility that helps improve the readiness of China’s overseas green development projects.
“Indonesia can utilize this GIFP to prepare a pipeline of renewable energy projects, structure funding, and lower project risks to accelerate the energy transition in Indonesia,” Fabby explained.
Furthermore, Fabby stated that BRI cooperation can be a strategy for developing large-scale renewable energy pilot projects. It also provides an opportunity to mobilize other renewable energy manufacturing industries.
The governments of Indonesia and China can discuss measures to address the coal-fired power plants in Indonesia that Chinese companies are developing. These plants have a total capacity of 7.6 GW, with 3.8 GW already operational, 2.9 GW under construction, and 0.9 GW for which Power Purchase Agreements (PPAs) have been signed. Along with promoting the use of renewable energy, the two governments can collaborate to intervene in these coal-fired power plants.
“According to the IESR study, at least 9.2 gigawatts of power plants will need to be retired during this decade to support the emission reduction goals set by the Paris Agreement. To replace them with renewable energy, Indonesia and China’s future partnership must find ways to facilitate asset owners of 7.6 GW of PLTU from China with PLN and Indonesian businesses. They need to discuss ways to retire PLTU assets and replace them directly with renewable energy,” said Deon Arinaldo, Energy Transformation Program Manager, IESR.
