Indonesia kicked off a plan to unleash $20 billion in global financing to help decarbonize its power sector, Reuters reported on Tuesday, and to increase the role that renewables plays in its overall energy mix.
The $20 billion in funds from lenders, including the United States and Japan, will be disbursed with immediate effect and will help Indonesia move forward with its plan to cut carbon emissions to 250 million metric tons for its on-grid power sector by the end of this decade.
Without the funds, Indonesia’s carbon emissions would likely exceed 350 million metric tons. Indonesia is one of the world’s most prolific carbon emitters.
Indonesia’s plan is to increase the role that renewable energy plays in its total power generation mix to 44 percent by 2030, just 12 percent last year.
“We have to move quickly because 2030 is less than seven years away. The partnership must be enhanced and accelerated to do the priority projects, including to immediately realise the financing commitments,” ad-interim chief minister for investment affairs, ErickThohir said on Tuesday.
But it will take more than $20 billion to reach its ambitious green goals. According to the country’s Comprehensive Investment and Policy Plan, or CIPP, nearly $100 billion will be needed to reach its goals, including $67 billion spread across 400 projects that need to start by 2030 if it is to hit its goals.
The $20 billion would serve as a “jump start” investment designed to kick things off and attract even more investments, Michael Kleine, US charge d’affaires in Jakarta said.
Indonesia’s Pertamina has been expanding its presence in geothermal energy, with PT Pertamina Geothermal Energy TbK (PGE) announcing cooperation with Chevron New Energies International and Mubadala Energy for a JSA to explore geothermal potential in Kotamobagu.
PGE earned an 8.4 by ESG rating agency Sustainalytics for its ESG practices—a score that puts the firm as the third highest-ranked utility company based on ESG factors.