Indonesia delays launch of JETP investment plan for public review

A statement from the office cited a need for more time to devise “a technically credible pathway for Indonesia’s power sector transition” as a reason for the delay,

Divya Karyza

Divya Karyza

The Jakarta Post


President Joko Widodo (right) and United States President Joe Biden walk the red carpet at The Apurva Kempinski Bali hotel in Nusa Dua on Nov. 14, 2022. PHOTO: BUREAU OF PRESS, MEDIA, AND INFORMATION OF PRESIDENTIAL SECRETARIAT/ THE JAKARTA POST

August 18, 2023

JAKARTA – The Just Energy Transition Partnership (JETP) Secretariat, tasked with overseeing the implementation of Indonesia’s US$20 billion JETP, has pushed back the launch of its much-anticipated investment plan to “later this year”.

A statement from the office released on Wednesday cites a need for more time to devise “a technically credible pathway for Indonesia’s power sector transition” as a reason for the delay,

The final Comprehensive Investment and Policy Plan (CIPP), which underpins the landmark climate financing deal signed at the Group of 20 Bali Summit last year, was expected to be unveiled on Wednesday.

The CIPP is a blueprint containing a list of projects to be funded under the JETP, and is key for Indonesia to access the scheme’s loans, which are to be made available over a period of three to five years.

Delaying its launch, according to Energy and Mineral Resources Ministry Secretary-General Dadan Kusdiana, would also allow for a period of robust public consultation before the CIPP was finalized.

“The Indonesian public will have the opportunity to review the full draft of the CIPP and submit comments and feedback,” Dadan said in the statement.

The JETP for Indonesia’s energy transition, which has been over a year in the making, includes $10 billion in pledges consisting of grants and concessional loans from multilateral development banks as well as the International Partners Group (IPG), coled by the United States and Japan.

The remaining $10 billion derives from investments by private financial institutions coordinated through the Glasgow Financial Alliance for Net Zero (GFANZ).

To access the funds, Indonesia is required to present a comprehensive investment plan to achieve the country’s energy transition targets, which are more ambitious than its previous targets.

They include achieving a maximum cap of 290 million tonnes in annual carbon emissions from the power sector and increasing the renewable energy share to at least 34 percent of total generation capacity, both by 2030.

A spokesperson from the US Embassy in Jakarta said the embassies of the IPG countries would continue to work closely with the JETP Secretariat.

“The CIPP will be jointly launched by the Indonesian government and the International Partners Group later this year after a robust public comment period,” the spokesperson told The Jakarta Post on Wednesday.

The JETP Secretariat’s statement also says that after public input is collected and addressed, the government and the IPG will jointly launch the plan later this year.

“The draft [CIPP] is the result of an inclusive multi-stakeholder process involving many stakeholders. They [took part in] over a hundred days of intense discussions,” JETP Secretariat head Edo Mahendra said in the statement.

Hiccup in captive power plant

Fabby Tumiwa, executive director of the Institute for Essential Services Reform (IESR), said many aspects of the CIPP needed to be resolved before the document could be launched, including a strategy for meeting the carbon emissions targets in the power sector.

The sector’s peak emissions target is based on a joint report published in 2022 by the International Energy Agency (IEA) and Indonesia’s energy ministry, An Energy Sector Roadmap to Net Zero Emissions in Indonesia.

“When the [290 million tonnes] baseline was set based on the [joint report], not all captive coal-fueled power plants had been included in that report,” Fabby told the Post on Wednesday.

“After the road map was published, the government gave permission to build new captive coal-fueled power plants,” he continued. As a result, a greater number of captive power plants were excluded when proceeding with the JETP.

Fabby underlined that the CIPP must include detailed information on how many renewable power plants could be built and how many coal-fired power plants could be retired to calculate the precise amount of investment required.

“This is not an easy thing to do […]. All the details are interconnected. And we all know that the JETP Secretariat was only established in March and the working group in April or May,” he added.

Fabby did not see the delay of the plan’s announcement as a negative in the Indonesian JETP’s implementation, arguing that the extra time would provide an opportunity to optimize the document.

“The next step [for stakeholders] can be determined in more detail, so when we officially announce the CIPP, it is fully implementable,” he explained.

According to Fabby, the final draft could be available for public review by the end of September.

“Two weeks after that, the internal team will review the document, and then it will be ready for official release,” he said.

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