Indonesia’s plan to retire 6.7 GW of coal-fired capacity by 2030 faces uncertainty as international funding under the $20 billion Just Energy Transition Partnership (JETP) stalls. Officials warn that while some renewable projects have secured financing, coal retirement funds remain delayed, threatening the country’s decarbonization targets and energy transition credibility.
Funding Delays Threaten Transition
Indonesia’s JETP program, launched in 2022 with pledges from donor nations, aimed to mobilize $20 billion in loans and grants to accelerate coal retirement and renewable expansion. However, officials now caution that the coal phase-out component is at risk due to slow disbursal and unresolved mechanisms for compensating plant owners.
Key Highlights
Coal retirement target: 6.7 GW of coal capacity scheduled for closure by 2030 is jeopardized.
Funding gap: Despite pledges, coal retirement financing has not materialized, creating delays.
Partial progress: $1.1 billion worth of renewable projects have secured funding under JETP.
Donor dynamics: The program continues despite U.S. withdrawal, with Germany and Japan as co-leads.
Challenges: Negotiating early retirement deals and ensuring grid reliability remain major hurdles.
Outlook
Without timely funding, Indonesia may prioritize renewable additions while deferring coal closures, risking lock-in of emissions and undermining confidence in global climate finance commitments.
Sources: Channel NewsAsia (CNA), Reuters, Devdiscourse, S&P Global Commodity Insights