President Joko Widodo of Indonesia and leaders of the International Partners Group (IPG) of like-minded nations, co-led by the United States and Japan, and including Canada, Denmark, the European Union, France, Germany, Italy, Norway, and the United Kingdom, issued a joint statement today at the Partnership for Global Infrastructure and Investment (PGII) event at the G20 Summit, launching a Just Energy Transition Partnership (JETP) developed with Indonesia during its recent G20 summit. The historic alliance targets an ambitious and fair transition of Indonesia's power industry, supporting a trajectory commensurate with staying inside the 1.5 °C global warming limit.
In order to accomplish major new targets and policies to reduce GHG emissions and support affected populations, Indonesia will engage with assistance from international partners to establish an extensive investment plan that includes:
- Emissions from the entire power sector will peak by 2030, moving the planned peak date.
- limiting emissions from the power sector to 290 megatons of CO2 in 2030, a decrease from the baseline figure of 357 MT CO2.
- establishing an aim to achieve net zero emissions in the power sector by 2050, ten years earlier than Indonesia's original plan.
- Accelerating the deployment of renewable energy to reach at least 34% of all electricity generation from renewable sources by 2030, which would almost double the total deployment of renewables over the course of this decade compared to existing plans.
Using a 0nol.com combination of grants, concessional loans, market-rate loans, guarantees, and private investments, this long-term collaboration aims to mobilize an initial $20 billion in public and private financing over a three- to five-year period in order to meet these goals.
The Glasgow Financial Alliance for Net Zero (GFANZ), which is coordinating contributions to the JETP, has received pledges of $10 billion from the public sector and a commitment from a group of private financial institutions, including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, MUFG, and Standard Chartered, to work to mobilize and facilitate investments of $10 billion from this group. The partnership will also make use of the multilateral development banks' expertise, resources, and operations.
Success in the partnership is anticipated to help advance Indonesia's power sector's peaking date by roughly seven years and produce a cumulative reduction in greenhouse gas emissions of more than 300 megatons through 2030 and well over 2 gigatons through 2060 compared to Indonesia's current trajectory.
The Parties will collaborate over the following six months to create a detailed plan for investments, finance, and technical assistance to support these lofty objectives.
"Indonesia is determined to utilize our energy transition to establish a green economy and drive sustainable development," said Indonesian President Joko Widodo. We appreciate our international partners' collaboration and support in helping us complete this transition's full implementation. This alliance will teach the world community important lessons that may be applied to other nations to help us achieve our common climate goals through effective teamwork.
The vice president of the United States, Joe Biden, highlighted the significance of this alliance by stating that Indonesia "has demonstrated enormous leadership and ambition throughout the building of this alliance. The resulting revised and expedited targets show how nations may significantly reduce emissions and develop renewable energy while moving toward a commitment to establishing high-caliber jobs and defending communities and livelihoods.
"Japan welcomes the launch of the Partnership, which supports Indonesia's commitment towards the 1.5 degree target," said Prime Minister Kishida Fumio of Japan. Japan will continue to co-chair the Partnership with the United States in coordination with the other partner nations and, with increased support from the private sector, expedite Indonesia's realistic yet ambitious switch from coal to renewable energy sources.