A unique financing program called JETP combines grants, equity investments, and concessional loans. Group of Seven (G7) members, multilateral banks, and private lenders support this program, collectively offering crucial financial support to help Indonesia meet its energy transition targets. The public can now access Indonesia's Comprehensive Investment and Policy Plan (CIPP) for the JETP, which provides a detailed plan for obtaining a sizeable $20 billion in funding for this project.
At first, Indonesia had set a goal of restricting emissions from the power industry to 290 million tonnes by 2030, working with a coalition of investors headed by the US and Japan. They also wanted to increase the percentage of renewable energy output to 34%. But those prior conversations did not completely clarify the nuances of the off-grid electricity system. With plans to build an additional 20.48 GW of captive coal power plants, Indonesia currently operates 13.74 GW of these facilities. The significant growth in the metal processing industry is responsible for this upsurge, according to a July research that the Asian Development Bank commissioned.
With more than 400 priority projects included in CIPP, a minimum investment of $67.4 billion is required overall. These projects span several different industries, including renewable energy installations and infrastructural development. Significantly, the plan calls for the early retirement of 1.7 GW of coal generating capacity by 2040, demonstrating Indonesia's commitment to gradually replacing high-emission energy sources with less polluting options.