Indonesia Inks JETP Deal for $20 Billion Investment in Renewables at G-20

At the mega meet of the G-20 countries in Bali, host Indonesia has inked deals with major countries and international institutions to attract some $20 billion to help the Southeast Asian country increase the use of renewable energy and reduce reliance on coal.

The agreement is called ‘Just Energy Transition Partnership,’ or JETP that will help developing countries reduce their reliance on fossil fuels that ultimately cause vagaries of climate change. Indonesia is also a major exporter of coal in the world.

Luhut Binsar Pandajaitan, Coordinating Minister of Maritime and Investment Affairs, Indonesia, said, “Indonesia has an important role to play in avoiding the worst impacts of climate change on our countries, our people and the environment.”

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As per reports, the governments of the USA, Japan, Canada, Denmark, France, Germany, Italy, Norway, the UK and the European Union will offer $10 billion as concessionary lending, grants and equity. The rest will be managed by the global financial institutions. As a deal, Indonesia has committed to reduce emissions from its power sector by 2030 and make it completely emissions-free by the middle of this decade.

US climate envoy John Kerry said that the agreement would truly transform Indonesia’s power sector from coal to renewables and support significant economic growth.

Last year during COP26 in Glasgow, South Africa became the first country to sign a JETP deal.

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Indonesia is infamous for being the third-largest producer of coal in the world. Its own coal based power generation plants have an operational life of about 45 years but their present age is of about just 12 or 13 years. Hence, their replacement looks like a costly affair but a necessary one.

Australian solar and storage developer Sun Cable had also entered into an MoU with the Indonesian government, to unlock over $150 billion in green industry growth in the archipelago.