What Can Indonesia Learn from South Africa's Experience of the Just Energy Transition Process?
Indonesia is currently in the process of preparing its comprehensive investment plan as part of the Just Energy Transition Partnership (JETP). This brief assesses the JETP process South Africa went through one year after it was announced to highlight any relevant findings and lessons to assist policy-makers implementing the Indonesian JETP.
Just Energy Transition Partnerships (JETPs) are a financing mechanism agreed between a group of industrialized countries and a developing country.
The second JETP deal was announced during the G20 Summit in November 2022. The IPG—led by the United States and Japan—pledged to mobilize USD 20 billion (around IDR 300 trillion) over the next 3–5 years to accelerate Indonesia’s energy transition through early retirement of coal power plants and deployment of renewable energy. The deal appears to herald a dramatic shift in energy policy, setting a new target for renewables—which will need to account for 34% of the country’s power production by 2030.
Having reviewed the experience of South Africa's JETP this brief recommends that Indonesia:
- Select Projects to Be Included in the JETP IP Carefully and Be Able to Demonstrate Results
- Agree on a Strong Energy Policy That Binds the Power Sector in Indonesia to the Coal Phase-Out Plan as Laid Out in the JETP IP
- Focus Clearly on the Social Impacts of JETP
- Seize the Opportunity of the JETP IP and Use Public Funds to Leverage Private Investment
- Mitigate Risk and Ensure Smooth Implementation of the JETP by Prioritizing the Achievement of a Broad Consensus Across Government
- Translate the Commitment to JETP Into Legislation
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