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ADB, Indonesia launch plan to retire coal plants early
Japan has committed US$25 million grant to the plan.
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Finance Minister Sri Mulyani Indrawati (center) attends the Asian Development Bank (ADB) ETM partnership launching held on Nov. 3 in Glasgow, Scotland. (ADB/ADB)
T
he Asian Development Bank (ADB) and the Indonesian government have launched a new financing scheme to speed up the retirement of high-emission coal-fired power plants in Indonesia, a scheme that developers claim to be the first of its kind in Asia Pacific.
ADB president Masatsugu Asakawa and Finance Minister Sri Mulyani Indrawati announced the partnership to develop the Energy Transition Mechanism (ETM) pilot program during the United Nations COP26 climate summit in Glasgow, the United Kingdom, on Wednesday.
The ETM will pool funds from private banks, philanthropists, multilateral organizations and the Group of Seven countries, among others, to acquire and then retire coal plants early.
“The ETM will upgrade Indonesia’s energy infrastructure and accelerate the clean-energy transition in a just and affordable manner,” Sri Mulyani said at the launch ceremony.
The ADB has completed a pre-feasibility study on the ETM, and is currently conducting a full feasibility study to finalize the scheme’s financing structure, and to identify coal plants to retire over the next two to three years. The ETM is slated for Indonesia, the Philippines and, possibly, Vietnam.
The Manila-based lender hopes to retire 50 percent of the coal plants in the three Southeast Asian countries over the next 10 to 15 years through the ETM, which would cut 200 million tons of carbon dioxide (CO2) emissions.
Japan's Finance Ministry has committed a US$25 million grant to the ETM, the first seed financing, ADB said in a release.
