Indonesia secured significant energy transition funding commitments at the G20 Summit in Bali, including the JETP and ETM schemes, worth USD 20 billion and USD 250-300 million, respectively. CELIOS highlighted several technical issues, such as project transparency, public involvement, and lessons from South Africa’s JETP experience. “The first six months of the JETP are crucial. Public participation, especially by those affected by the energy transition, must be a government priority,” the CELIOS report stated.
Early retirement programs for coal-fired power plants, such as Cirebon 1, are considered overvalued, with USD 250-300 million allocated for assets with a 40-50 year operational life. CELIOS stressed, “Energy transition funds could be used for renewable energy investments. The allocation between funds for early coal plant retirement and renewable energy investment must be balanced.” In addition, these funds should not be perceived as a bailout for PLN’s electricity oversupply, and electricity purchase contracts with the IPPs responsible for the oversupply need to be revised.
To ensure long-term impact, CELIOS recommends improving PT SMI’s governance and transparency as the focal point for financing, imposing a moratorium on the construction of new coal-fired power plants, including captive plants, and negotiating financing with developed countries or multilateral institutions so that it is linked to a debt cancellation scheme. Every dollar of funding should have a multiplier effect on employment and the economy.
Indonesia secured significant energy transition funding at the G20 Summit in Bali, including the JETP and ETM schemes with USD 20 billion and USD 250-300 million, respectively. CELIOS highlighted several technical issues, including project transparency, public involvement, and lessons learned from South Africa’s JETP experience. “The first six months of JETP are crucial. Public participation, especially of those affected by the energy transition, must be a government priority,” the CELIOS report stated.
Early retirement programs for coal plants, such as Cirebon 1, are considered overvalued, with USD 250–300 million allocated for assets with a 40-50 year operational life. CELIOS stressed, “Energy transition funds could be used for renewable energy investments. The allocation between early retirement funds and renewable energy investment must be balanced.” Additionally, these funds should not be seen as a bailout for PLN’s electricity oversupply, and electricity purchase contracts with IPPs causing the oversupply should be revised.
To ensure long-term impact, CELIOS recommends improving PT SMI’s governance and transparency as the focal point for energy transition financing, enforcing a moratorium on new coal plants including captive power plants, and negotiating funding with developed countries or multilateral institutions as part of a debt cancellation scheme. Every dollar of funding should have a multiplier effect on jobs and the economy.