The JETP recognizes the need for enhanced financing from a wide variety of sources to pursue Indonesia’s climate targets. JETP intends to mobilize an initial $20 billion in public and private financing to decarbonize Indonesia’s energy sector, using a mix of grants, concessional loans, market-rate loans, guarantees, and private investments.

With commitments to mobilize an initial $20 billion in public and private financing, the JETP includes the Glasgow Financial Alliance for Net Zero (GFANZ) Working Group, comprised of an initial set of financial institutions including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, Mitsubishi UFJ Financial Group, and Standard Chartered. It will also leverage the expertise, resources, and operations of multilateral development banks. Private sector finance will be subject to catalytic public finance. With collective ambition by all parties, including enhanced engagement by the multilateral development banks, the public sector finance has the potential to generate significantly more in private finance than the amount above.

PLN Leadership

The JETP Investment and Policy Plan will determine financing options required for JETP projects. PT Sarana Multi Infrastructure (PT SMI), a Special Mission Vehicle of the Ministry of Finance, will manage a country platform to administer and oversee energy transition funds. Funds will be distributed in a multi-channel and multi-party manner, depending on the investment scheme and depending on the type of project. The Government of Indonesia will ensure that the agreed type of funding is the type of funding with the most appropriate interest rate for Indonesia and does not burden the Indonesian economy

PLN will play a key role in deploying JETP financing, subject to agreement with the JETP Investment and Policy Plan that includes a competitively tendered pipeline of projects. These projects must support continued progress in improvements to Indonesia’s policy and enabling environment. They must align with budgetary procedures and terms, be responsive to progress by the Indonesian government and relevant actors and be transparent in project reporting.

Impact

Based on the JETP Indonesia Joint Statement, funding mobilization is targeted to occur until 2027. JETP financing will accelerate the deployment of renewable energy to achieve Indonesia’s climate targets . Financing will accelerate the development of a vibrant and competitive local industry in renewable energy and energy efficiency by investing in local technological capacity and knowledge in collaboration with the IPG.