Indonesia Showcases Expenditure plan for Decarbonization

On Nov 21, Indonesia unveiled its investment plan to utilize the US$20 billion pledged by global lenders, spearheaded by the United States and Japan, to expedite the decarbonization of its power sector. The country also urged for prompt disbursement of the funds. Indonesia, through the Just Energy Transition Partnership (JETP), aims to reduce carbon dioxide emissions to 250 million metric tonnes for its on-grid power sector by 2030. This is a significant decrease from the estimated business-as-usual emissions of over 350 million.

The Comprehensive Investment and Policy Plan (CIPP) has been officially announced after a public consultation period, which followed the release of the draft earlier this month. Indonesia, a major contributor to greenhouse gas emissions, aims to boost its renewable energy share in power generation to 44 percent by 2030, up from approximately 12 percent in 2022.

"We have to move quickly because 2030 is less than seven years away. The partnership must be enhanced and accelerated to do the priority projects, including to immediately realize the financing commitments," Erick Thohir, ad-interim chief minister for investment affairs, said at the launch.

The CIPP stated that in order to reach the goals, a total of US$97.3 billion in investments would be necessary, with US$66.9 billion allocated to 400 projects that must commence by 2030 at the latest. According to Michael Kleine, the US charge d'affaires in Jakarta, the JETP funding is anticipated to kickstart energy transition investment and draw in additional financing.