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Indonesia’s JETP may draw in more funds for SE Asia’s energy transition: Fitch
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Coal is moved from barges onto a truck at the Karya Citra Nusantara Port in North Jakarta on Jan. 13.
(Reuters/Willy Kurniawan)
I
ndonesia’s Just Energy Transition Partnership (JETP) unveiled last month at the Group of 20 Summit in Bali will act as a catalyst to draw green investment into the wider region, a new report suggests, but the six-month period to firm up investment plans will be crucial.
If successful, the US$20 billion initiative could serve as a road map for other carbon-intensive economies in Southeast Asia, according to the research conducted by Sustainable Fitch, which is part of financial services company Fitch Group known mostly for its credit ratings.
“The [program] has the potential to inspire more confidence among investors to fund early-stage emerging-market transition projects where capital is often most needed,” stated the report published on Wednesday.
The JETP is a long-term program meant to speed up Indonesia’s energy transition, which is part of the country’s contribution to international efforts aimed at limiting global warming.
Indonesia has committed itself to reduce its greenhouse gas emissions by 31.89 percent against a business-as-usual scenario by the year 2030, or by 43.20 percent with international help.
The funds under the JETP are a mixture of loans, making up the largest part, and grants, and are to be disbursed within five years for increasing the share of renewable energy in the country’s energy mix and for retiring coal-fired power plants ahead of schedule. Donors include Canada, Denmark, Germany, Ireland, Italy, Japan, Norway, the United Kingdom and the United States.
Read also: Analysis: RI receives flurry of global pledges to help retire coal plants early
