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Indonesia unveils investment plan for USD20B energy transition pact

JAKARTA (AFP) – Indonesia on Tuesday launched an investment plan to attract USD20 billion pledged by Western nations in a renewable energy transition pact agreed last year for the archipelago to slash emissions and wean itself off coal.

The roadmap, which comes less than two weeks before the COP28 summit in Dubai, outlines Jakarta’s vision to reach net-zero power sector emissions by 2050 using cash from the Just Energy Transition Partnership (JETP).

Under the Comprehensive Investment and Policy Plan (CIPP), the Southeast Asian nation will seek to slash its carbon dioxide emissions to 250 million metric tonnes for its on-grid power sector by 2030.

That is down from a previous cap of 290 million.

“The CIPP provides a strategic roadmap for the ambitious energy transition in Indonesia by considering challenges including technical, financial, and social justice,” acting minister of maritime and investments, Erick Thohir said during the launch in Jakarta.

“We need to move quickly because 2030 is less than seven years away,” he said.

Booster station and floating array of the Cirata floating solar plant in West Java Province, Indonesia. PHOTO: XINHUA

Indonesia also plans to boost its renewable energy generation share to 44 per cent by 2030, up from an initial target of 34 per cent.

Jakarta has said it would need at least USD97.3 billion worth of investments, nearly five times more than the funding promised by the JETP investors, to achieve its target.

The public and private financing for the JETP, released last year, follows a model first trialled in South Africa and then announced for Vietnam and Senegal, with rich countries pledging funds for the developing world’s energy transition.

But Jakarta is reportedly unhappy about the deal’s proposed mix of financing, worried it will be offered mostly market-rate loans that saddle it with heavy debt.

The United States, Japan, Canada, and six European nations signed the deal with Indonesia – one of the world’s top coal exporters and coal power generators – to shift it away from its coal reliance.

Indonesia has pledged to stop building new coal-fired power plants but, despite an outcry from activists, it is continuing to build those that were already planned.

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