G20 Summit mobilises $20bn for Indonesia’s just energy transition

A Just Energy Transition Partnership (JETP) between the International Partners Group (IPG) and Indonesia was launched to mobilise $20 billion in public and private financing to drive home the Asian country’s climate and energy targets.

The overall aim of the partnership - which was announced during the G20 summit in Bali, Indonesia - is to mobilise $20 billion over a three-to-five-year period, using a mix of grants, concessional loans, market-rate loans, guarantees and private investments.

Half of the full sum, $10 billion in public funds, will be mobilised by IPG members, which is co-led by the United States and Japan and includes Canada and the United Kingdom as well as EU Member States (Denmark, France, Germany, Italy, Norway). And at least $10 billion of private finance will be mobilised and facilitated by the Glasgow Financial Alliance for Net Zero (GFANZ) Working Group.

In a joint statement, Indonesia and its International Partners announced the commitment to support the Asian country in its energy transition, consistent with the Paris Agreement goals and contributing to keep 1.5°C global warming limit within reach.

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It includes an accelerated power sector emissions reduction pathway to net zero by 2050 and a strategy based on the expansion of renewable energies, the phase down of on and off-grid coal-fired electricity generation, and further commitments to regulatory reforms and energy efficiency.

President of the European Commission, Ursula von der Leyen said, “The Just Energy Transition Partnership for Indonesia will chart a roadmap to a greener, cleaner future in the country – and a future full of opportunities for the Indonesian people. They will be the ones reaping the benefits of the transformation of their economy, as Indonesia becomes a renewables hub.”

The EU together with international partners will back Indonesia in its endeavours to develop an investment plan that will put them in the right path to achieve new climate targets and policies to reduce greenhouse gas emissions and support those impacted communities along the process.

Implementation of concrete actions achieving a just energy transition for workers and communities, particularly those most affected by an energy transition away from coal is an essential aspect of the Partnership.

The next six months will see Indonesia and its supporters work together to build up a concrete plan for investments, financing and technical assistance.

Indonesia’s JETP is the second of its kind after the launch of the JETP with South Africa at COP26 in Glasgow.

President of Indonesia Joko Widodo, President of the European Commission Ursula von der Leyen on behalf of the EU, and leaders of the IPG launched the partnership with Indonesia during the Partnership for Global Infrastructure and Investment (PGII) event at the G20 Summit, taking place on 15-16 November 2022 in Bali.