$20 Billion Renewables Investment Plan Launched by Indonesia
Indonesia has begun implementing its $20bn renewables investment plan to reduce carbon emissions and speed up the shift toward clean energy. The plan was launched under the Just Energy Transition Partnership (JETP), with support from Japan, the US, and other global leaders.
A Plan to Cut Carbon Emissions
The renewables investment plan is part of Indonesia’s commitment to cut CO2 emissions by 250 million tonnes from its power sector. The country aims to achieve this goal by 2030. The plan’s aims are detailed in the Comprehensive Investment and Policy Plan (CIPP), a 327-page document revealed to the public for its feedback.
The CIPP details why $97.3 billion is needed for Indonesia to achieve its goals. Four hundred clean energy projects earmarked to commence by 2030 require $66.9 billion alone. 60% of Indonesia’s electricity production still relies on coal, and the CIPP expects emissions from this to peak by 2030. Indonesia wants to reduce its coal capacity while scaling the adoption of gas and renewables.
The Viability of the Renewables Investment Plan
Indonesia’s plans are ambitious, and some environmental organisations believe it might not be as viable as the country thinks. The Centre for Research on Energy and Clean Air believes that the emphasis on biomass and hydropower is excessive. The organisation is also cautioning Indonesia about the limitations of expanding solar power energy.
According to another organisation, Perusahaan Listrik Negara (PLN), Indonesia needs an investment of $172 billion by 2040 to achieve its renewable energy capacity targets. Environmentalists are also worried about the JETP’s financial structure since it is currently heavily reliant on commercial loans.
With the renewables investment plan and its ambitious goals, there are concerns about the potential risks of the nation accumulating debt. “Debt traps” could happen should Indonesia and JETP be too reliant on commercial or concessional loans.
For the renewables investment plan to succeed, there is an emphasis on Indonesia to take swift action. It needs to focus on expediting partnerships for priority projects that are crucial.
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Indonesia has ambitious plans for the future of its renewable energy sector. For the investor who is ready to come on board, we are ready to help. For expert guidance and one-stop solutions to set up a business in Indonesia’s renewable energy landscape, contact 3E Accounting.