Partnership for a just energy transition with Indonesia

indonesian president Goku WidodoCommission Chair Ursula von der Leyen As a representative of the European Union, Heads of State and Government of the International Partners Group (IPG) launched a Partnership for a Just Energy Transition at the G20 Summit in Bali. It was jointly developed with Indonesia and aims to help the country reduce greenhouse gas emissions. To this end, US$20 billion in public and private funds will be mobilized over the next three to five years, including €1 billion in support from the European Investment Bank.

Indonesian President Joko Widodo stated: “Indonesia is determined to use its energy transition to achieve a green economy and promote sustainable development. We are grateful for the cooperation and support of our international partners in its full implementation, which will accelerate this transition. This partnership will provide valuable lessons for the global community and can be replicated in other countries to help achieve our common climate goals from through tangible cooperation.

European Commission President Ursula from Lee‘ explained: “Partnership for a just energy transition for Indonesia will set the path for a greener and cleaner future in the country and a future full of opportunity for the Indonesian people. People will reap the benefits of transforming their economy and Indonesia will become a renewable energy hub.”

The International Partners Group (IPG) brings together like-minded countries Denmark, Germany, the European Union, France, Italy, Canada, Norway and the United Kingdom, and is co-chaired by the United States and Japan. Together with President Widodo, we announced the collaboration at the Global Infrastructure and Investment Partnership (PGII) event.

Indonesia, with the support of international partners, will develop a comprehensive investment plan to implement key new goals and strategies to reduce greenhouse gas emissions and support affected communities by:

• Total peak emissions from the energy sector by 2030, leading to a projected peak in emissions;
• Reducing energy sector emissions to 290 megatons of carbon dioxide₂ in 2030 and thus below the baseline of 357 MtCO2₂;
• Setting the goal of achieving carbon neutrality in the energy sector by 2050, and moving forward with Indonesia’s goal of carbon neutrality for the energy sector for ten years;
• Accelerate renewable energy deployment to ensure that at least 34 percent of total electricity generation comes from renewables by 2030, which will nearly double total renewable energy use over this decade compared to current plans.

$20 billion in public and private financing

To achieve these goals, this long-term partnership will initially mobilize $20 billion in public and private financing over a three- to five-year period through a combination of grants, concessional loans, commercial loans, guarantees, and private investments.

Contributions to the JETP include $10 billion in public sector commitments and an initial private investment of $10 billion from private financial institutions including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, MUFG and Standard Chartered, in coordination with From the Glasgow Financial Alliance for Net Zero (GFANZ). The partnership will also draw on the expertise, resources and processes of the multilateral development banks.

The European Union will support the partnership in the amount of €1 billion through the European Investment Bank.

A successful partnership should help Indonesia’s energy sector emissions peak nearly seven years ago and a cumulative reduction in greenhouse gas emissions of more than 300 megatons by 2030 and a reduction of more than 2 gigatons by 2060 compared to Indonesia’s current levels.

Over the next six months, the two parties will work together to develop a concrete plan for investment, financing and technical assistance to support these ambitious goals.

More information

Press release: The European Union and international partners have launched a pioneering partnership for a fair energy transition with Indonesia

Joint press release: Indonesia and international partners secure ground-breaking climate goals and associated financing (following the German translation)

Joint statement from IPG and Indonesia

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