The deal, which includes $10 billion in public funding and another $10 billion from private sector investors, was unveiled during G20 meetings in Bali on Tuesday after more than a year of negotiations between leaders. As part of the agreement, Indonesia has committed to cap electricity sector emissions to 290 megatons of CO₂ per year by 2030 and to produce about a third of its energy from renewable sources by 2030. Indonesia is a coal-producing country and one of the world’s largest carbon emitters. Its new commitment to achieve peak emissions by 2030 is seven years earlier than under previous commitments and includes on-grid, off-grid and off-grid electricity systems in the calculation. The country has agreed that its electricity sector will achieve net zero by 2050. The Just Energy Transition Partnership offers a combination of concessional financing, grants and loans from the US, Japan, Canada, the UK and several European countries, including the EU and Norway. The agreement is the second in what is seen as a series for emerging nations to receive incentives to stop using the dirtiest fossil fuels. The first was an $8.5 billion deal with South Africa, and talks are underway with Vietnam. The deal is a victory for Joko Widodo, Indonesia’s president, who is in his second and final term. Southeast Asia’s largest economy has vast amounts of clean energy, including hydroelectric and geothermal power, and Jokowi, as he is known in the country, has been keen for multinationals to provide finance and technology to tap into that potential. Arsjad Rasjid, president of the Indonesian Chamber of Commerce and Industry, said the investment was a landmark moment. “More countries and organizations are beginning to understand the need for an energy transition and the dilemma facing developing countries,” he said. Recommended But Indonesia’s environmental record continues to draw criticism. Land-use change, which includes deforestation and forest fires, is responsible for a large portion of greenhouse gas emissions, while the country relies on dirty coal-fired power to power its growing number of nickel processing plants. Private sector contributions were expected from the lenders and investors that make up the Glasgow Financial Alliance for Net Zero, a coalition of more than 500 financial institutions including Citibank, Deutsche Bank, HSBC and Standard Chartered, a US official said. John Kerry, the US climate envoy, said the deal was “groundbreaking” and that all partners were “proud”. “We have built a collaborative platform that can truly transform Indonesia’s energy sector from coal to renewables and support significant economic growth,” Kerry said. The two sides agreed to deliver a plan within three to six months for investment, financing and technical support to address emissions reductions. A State Department official said US diplomats were “eager” to start “rolling up their sleeves” and “move from the policy statement of starting the gun to the actual investment as quickly as we can.”
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