Indonesia officially launches $20bn renewables investment plan

Indonesia officially launched its plan to mobilise a $20bn investment fund for decarbonisation on Tuesday as the country looks to accelerate its transition towards clean energy.

Financing for the fund, which was set up under Indonesia’s JETP, is led by the US and Japan, among other global leaders, as the country seeks to cut CO₂ emissions from its on-grid power sector by 250 million tonnes by 2030. It also has targets to increase the portion of renewable energy in its power mix to 44% by 2030, up considerably from the 12% seen last year.

A 327-page draft of the investment roadmap, known as the Comprehensive Investment and Policy Plan (CIPP), was initially released at the beginning of this month for public consultation.

The CIPP outlines the need for further investment worth $97.3bn if Indonesia is to meet these targets. This includes $66.9bn for 400 clean energy project proposals, which must be started by 2030 at the latest.

Of Indonesia’s electricity mix, 60% is still powered by coal, according to statistics from the International Energy Agency, and profits from the industry remain huge. In 2022 alone, the country earned $46.7bn from coal exports. The CIPP projects that emissions from on-grid coal generation will peak well before 2030 and that by the end of the decade, the country will see coal capacity reduced to 2020 levels as renewables and gas, a less polluting fossil fuel, are adopted at scale.

The CIPP also aims to significantly accelerate the deployment of wind and solar power compared with previous energy transition targets, but commitment to the clean energy sources remains insufficient, according to some environmental bodies.

The Centre for Research on Energy and Clean Air, a non-profit think tank, said in a statement reacting to the draft roadmap: “While the ambition to increase the share of renewable energy in power generation by 2030 is welcomed, there is an excessive focus on biomass and hydropower and overly conservative limits on solar power expansion.

“There is no reason why Indonesia cannot pursue more than 32 gigawatts (GW) of solar to be installed before 2030, based on experiences from China, among others,” it added.