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RI may miss emission reduction target amid insufficient JETP funding
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Smokestacks at the Suralaya coal-fired power plant spew fumes on Sept. 21, 2018, into the skies above Cilegon, Banten. International pressure to accelerate decarbonization may force Indonesia’s hand in transitioning away from coal. (AFP)
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ndonesia may lack the necessary funding to complete the energy transition, putting the country at risk of missing its emission reduction targets, especially those of the next seven years.
Indonesia Just Energy Transition Partnership (JETP) Secretariat Deputy Chair Paul Butarbutar said on Wednesday that as part of its emission reduction ambitions, the country requires financing to fund commercially unviable projects such as the early retirement of coal-fired power plants.
So far, Indonesia has only secured US$500 million from Climate Investment Funds (CIF) under the Energy Transition Mechanism (ETM) signed last year in the form of concessional funding, which the Asian Development Bank (ADB) has described as low-cost equity or debt.
"Other than that, we don't have any money left," Paul told audiences during a side event at the ASEAN Finance Ministers and Central Bank Governors Meeting.
He acknowledged that Indonesia has received $20 billion in pledges under the JETP program, comprised of $10 billion in public funds in the form of grants and concessional loans from multinational development banks and the International Partners Group (IPG), co-led by the United States and Japan.
The other $10 billion comes from investments by private financial institutions coordinated through the Glasgow Financial Alliance for Net Zero (GFANZ).
However, the JETP Secretariat has so far only seen less than $300 million in grants, he said, about half of which is earmarked to finance technical assistance instead of the actual projects.
