Indonesia has delayed the announcement of Just Energy Transition Partnership (JETP) negotiations, as Western countries have said they might not be ready to finance the early shut-down of coal plants in the Asian country.
This poses a major setback, as Indonesia is the seventh-largest producer of coal-fired power in the world, Reuters reports.
“During the discussion it is very clear that they are not eager to provide financing for early retirement,” said Septian Hario Seto, Indonesia’s deputy of investment at its Coordinating Ministry for Maritime and Investment Affairs, as cited by Reuters.
The first country to secure a financing pledge under JETP was South Africa, which reached a deal worth $8.5 billion in 2021.
Indonesia and Vietnam followed in its steps the year after, with $20 billion and $15.5 billion, respectively.
Indonesia’s JETP announcement was planned for August 2023, however, according to the country’s Finance Minister Sri Mulyani, rising borrowing costs have stalled negotiations.
By 2030, Indonesia must cap and reach a peak in its carbon emissions from the power sector of 290 million metric tons in accordance with the JETP. The peak in 2030 would be 25% lower than the peak previously predicted for 2037.
Vietnam’s greenhouse gas emissions are predicted to peak in the power sector by 2030, rather than the prior prediction of 2035, according to the JETP agreement, which would also cap the sector’s CO2 emissions at 170 million tons by 2030 and 101 million tons by 2050.
Vietnam established a secretariat in July to implement the JETP, under the direction of Minister of Natural Resources and Environment Dang Quoc Khanh, and with representatives from the finance, industry and commerce, and planning and investment ministries.
“The transition to a net zero global economy will not be easy, equally distributed, or necessarily clean, and donors must help affected populations if they expect developing nations to buy into this vision,” said Gregory Poling, a senior fellow for the Southeast Asia Program at the Washington think-tank Center for Strategic and International Studies (CSIS).
