Indonesia Secures IDR 310 Trillion Funds for Energy Transition from the US

The United States government is committed to supporting Indonesia’s energy transition program through the Just Energy Transition Partnership or JETP. Through the climate pact of the United States and Japan along with other partners, Indonesia is certain to secure initial funding from JETP of US$20 billion or the equivalent of IDR 310.7 trillion, an assumed exchange rate of IDR 15,535. Public and private funding is allocated for a period of 3 years to 5 years. Head of U.S. Department of State Richard Duke said the funding support was strengthened by Indonesia’s position as a developing country with progressive investment growth in the downstream side of the mineral industry in recent times.

“Indonesia has recorded investments in rapid industrialization including captive generators that are off the grid to support mining and mineral processing,” said Richard during a press conference at the Ministry of Energy and Mineral Resources, Jakarta, Thursday (16/2/2023). The mineral downstream, said Richard, is Indonesia’s strategic position to support the global clean energy ecosystem in the future. Thus, he said, JETP’s financial support is expected to accelerate the transition from coal-based power plants to new renewable energy (EBT) in the mineral industry’s electricity system. “To replace coal-fired power plant operations following a significant growth in demand amid the supply chain for electric vehicles and other products,” he said.

As previously reported, the Ministry of Energy and Mineral Resources (ESDM) has officially started negotiations and the formulation of a comprehensive investment plan (CIP) related to the follow-up of the Just Energy Transition Partnership (JETP) commitment from a number of countries and donor agencies. The formulation of the CIP was marked by the launch of the JETP Secretariat Office, which is located in the Secretariat General building of the Ministry of Energy and Mineral Resources, as a forum for communication between the government and donors. “Today we inaugurated the office so we started the kick-off program from JETP which is supported by several parties as well as international banking,” said Plt. Director General of Electricity of the Ministry of Energy and Mineral Resources Dadan Kusdiana during a press conference at the Ministry of Energy and Mineral Resources, Jakarta, Thursday (16/2/20230).

Dadan said that the government together with donors would begin negotiations regarding the JETP investment plan within the next 3 to 6 months. Broadly speaking, said Dadan, discussion of the investment plan will focus on developing the installed capacity of new renewable energy generators (EBT) and early retirement of steam power plants (PLTU). “Now we have a RUPTL of 20.9 GW for EBT, we already have a list of candidates for coal fired PLTU retirement, later in the CIP we will negotiate there,” he said. Later, the government plans to channel the JETP pooled funds to divert the investment plan to build a PLTU outside the PLN grid into an EBT generator. The plan is expected to cut new investment in coal power plants amidst smelter investment which has intensified this year.


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