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Indonesia Just Energy Transition Comprehensive Investment and Policy Plan Launched

CIPP 1

Joint Statement

The International Partners Group (IPG), co-led by the United States of America and Japan and comprised of Canada, Denmark, the European Union, the Federal Republic of Germany, the French Republic, Norway, the Republic of Italy, and the United Kingdom of Great Britain and Northern Ireland, jointly welcome the launch of Indonesia’s Just Energy Transition Partnership (JETP) Comprehensive Investment and Policy Plan (CIPP).

Launched in Jakarta today, the CIPP is a roadmap for the government of Indonesia and the IPG to achieve the objectives laid out in the JETP Joint Statement, announced at the G20 Leaders’ Summit last year in Bali.  Under the Joint Statement, Indonesia committed to limit emissions, accelerate renewable energy development, and set a goal to achieve net zero emissions in the power sector by 2050.  To support these ambitious targets, the IPG committed to mobilise $10 billion in financing and the Glasgow Financial Alliance for Net Zero (GFANZ), a global coalition of leading financial institutions committed to accelerating the net zero transition, committed to mobilising and facilitating another $10 billion in financing.

The culmination of a year’s worth of work, the CIPP maps out a technical pathway for Indonesia’s power sector, recommends policy changes needed to successfully transition the power sector, and outlines a just transition plan.  It also serves as the basis to drive the $20 billion in JETP financing toward specific projects and priorities for Indonesia’s energy transition.

The CIPP technical pathway focuses initially on Indonesia’s on-grid power sector.  Under the CIPP technical pathway for the on-grid system, Indonesia’s on-grid system will emit no more than 250 MT CO2, down from a baseline of 305 MT, and will achieve 44% renewable energy generation share by 2030.  The partnership will work together to complete an analysis of Indonesia’s off-grid power sector in the coming months.  This analysis will serve as the basis for implementing the necessary measures to achieve a comprehensive energy transition.

The $20 billion funding package will be disbursed through various mechanisms, including via grants, concessional and non-concessional loans, and investments, and guarantees. The IPG’s funding will direct support toward the priorities and projects identified in the CIPP, including renewable energy deployment; transmission and grid build out; managed phaseout and reduction in emissions from coal plants; and just transition initiatives.

As next steps, the Indonesian government and the IPG, supported by the JETP Secretariat, will continue to work together to implement the CIPP.  The IPG and GFANZ investors are actively working to direct financing towards potential JETP projects, and Indonesia’s implementation of the CIPP’s policy recommendations will enable the business environment for renewable investments.  These combined efforts are designed to help catalyse additional investments in Indonesia’s energy transition and spark a boom in Indonesia’s renewable energy sector.

Kanasugi Kenji, Ambassador of Japan to Indonesia said: “Japan welcomes the release of the Comprehensive Investment and Policy Plan, which shows an ambitious pathway towards the net zero. The Just Energy Transition Partnership will promote Indonesia’s clean energy and economic development, which will also contribute to more sustainable, more prosperous and inclusive global economies and societies. Japan will continue to co-lead this JETP with the U.S., in coordination with the other partner countries, to support Indonesia’s realistic but ambitious decarbonisation transition, while respecting Indonesia’s country ownership. Japan will continue to contribute to global decarbonisation efforts through various initiatives including JETP.”

Michael F. Kleine, Chargé d’Affaires, Embassy of the United States to Indonesia said: “Indonesia’s roadmap to reducing carbon emissions – the Indonesia JETP Comprehensive Investment and Policy Plan – is an important milestone demonstrating Indonesia’s leadership towards reaching net zero in the power sector by 2050 and promoting economic growth powered by renewable energy.”

Richard Le Bars, Chargé d’Affaires, Embassy of Canada to Indonesia and Timor-Leste said: “The launch of the Indonesia Just Energy Transition Partnership Comprehensive Investment and Policy Plan demonstrates continued multilateral collaboration in support of Indonesia’s ambitious move towards clean energy systems and a sustainable future. Canada is committed to pursuing this collaboration with Indonesia and other partners, recognising our shared interest in ensuring an inclusive, clean energy future in Indonesia and the wider Indo-Pacific region.”

Per Brixen, Deputy Head of Mission, Embassy of Denmark to Indonesia, Malaysia, Timor-Leste, Papua New Guinea and ASEAN said: “Today’s launch of the Comprehensive Investment and Policy Plan (CIPP) marks another big step in Indonesia’s green transition. The CIPP demonstrates both a pathway and important steps to achieve a transition for Indonesia’s on-grid power sector that is not only green but also just. Denmark will continue supporting Indonesia building on our more than seven years of close technical collaboration on renewable Energy development, with the Indonesian Government.”

Denis Chaibi, Ambassador of the European Union to Indonesia and Brunei Darussalam said: “The Indonesian Just Energy Transition Partnership (JETP) Comprehensive Investment and Policy Plan (CIPP) is the beginning of a transformative path that will allow Indonesia and the European Union to jointly contribute to the global fight against climate change. Through a mix of grants and concessional loans, the EU, the European Investment Bank and EU Member States have pledged over $3.7 billion for the transition away from fossil fuels. Moving forward, we have a unique opportunity to work together on the implementation of the CIPP, including on off-grid decarbonisation pathways.”

Fabien Penone, Ambassador of France to Indonesia, Timor Leste and ASEAN said: “The release of the Comprehensive Investment and Policy Plan (CIPP) marks an important milestone in our collective effort to support and accelerate Indonesia’s energy transition in a just way that leaves no-one behind and brings about benefits for the Indonesian economy, the Indonesian people and the climate. France will keep engaging closely with the Indonesian government and international partners to deliver results in line with the high level of ambition of JETP.”

Ina Lepel, Ambassador of Germany to Indonesia said: “Today’s launch of the Comprehensive Investment and Policy Plan is a great success towards a green energy transition in Indonesia. The Government of the Federal Republic of Germany highly appreciates the dedication and ambitions of the Government of Indonesia and is committed to provide substantial financing for implementing our Just Energy Transition Partnership. Together, we will shape a future where clean and affordable energy drives progress and preserves our planet for generations to come.”

Benedetto Latteri, Ambassador of Italy to Indonesia said: “The CIPP will set the route for the achievement of JETP’s objectives. We acknowledge the effort made by the Indonesian Government. Italy is proud to be on the side of Indonesia in this ambitious path and to put the Italian state of the art technology and skills to the benefit of Indonesia for sustaining its energy transition efforts.”

Rut Krüger Giverin, Ambassador of Norway to Indonesia said: “Norway is delighted to take part in this partnership and to support Indonesia’s efforts to develop clean energy and speed up the energy transition. We believe the Comprehensive Investment and Policy Plan will provide a good framework for mobilising capital to accelerate the deployment of renewable energy in Indonesia. Norway will continue to support Indonesia’s commitment to reduce emissions and fight climate change.”

Dominic Jermey, His Majesty’s Ambassador to Indonesia and Timor-Leste said: “I congratulate the Government of Indonesia for today’s successful CIPP launch. The plan lays out important steps for the on-grid power sector and sets the stage for future strategies for the off-grid power sector. The United Kingdom remains a steadfast partner in Indonesia’s ambitions for energy transition. Partners across the domestic spectrum, the international community and the private sector will be vital to help Indonesia achieve its renewables targets and infrastructure investments.”