THE TROUBLE WITH GAS IN INDONESIA

This case study by Trend Asia and partners argues that the World Bank Group's (WBG) continued financial and technical support for gas infrastructure in Indonesia undermines the Paris Agreement and the country's own decarbonisation goals. The document highlights how WBG strategies encourage a transition from coal to gas rather than leapfrogging to renewables, potentially locking Indonesia into fossil fuel dependency for decades.

• The World Bank Group's Country Partnership Framework (CPF) 2021-24 for Indonesia promotes the "acceleration of deployment of natural gas and biogas" and aims to improve the investment climate for private investors through regulatory reform and gas infrastructure planning. This planning may encompass the development of new ports, pipelines, regasification plants, LNG import terminals, and fossil gas power stations.
• The World Bank's December 2021 Indonesia Economic Prospects Report (IEP) proposes a decarbonisation scenario that would result in Indonesia doubling its installed gas capacity between 2021 and 2040. This projection contradicts the International Energy Agency's Net Zero Emissions by 2050 roadmap, which requires a more than 50% reduction in global natural gas demand to limit warming to 1.5C.
• The World Bank's 2018 pledge to stop financing upstream oil and gas is undermined by indirect financing through Financial Intermediaries (FI). These investments, which make up over half of the International Finance Corporation's (IFC) private sector portfolio, allow for the continued private financing of upstream oil, gas, and coal by delegating environmental and social management to the FI clients.
• World Bank funding has historically supported the expansion of gas projects, such as the BP Tangguh project. A $500m First Indonesia Sustainable and Inclusive Energy DPF loan required the state energy company PLN to enter new long-term gas supply agreements, contributing to a twelve-fold increase in gas contracted for the Jawa 2 power plant between 2016 and 2020.
• Indonesia's energy transition faces obstacles including the classification of 'coal gasification' as 'new energy' in a Renewable Energy Bill (RUU EBT) debated in April 2022. Additionally, while the 2021-2030 Electricity Business Plan (RUPTL) aims to increase the renewable energy share from 12% to 23% by 2025, coal is still projected to comprise 59.4% of the energy mix by 2030.

APA

Trend Asia (2022). THE TROUBLE WITH GAS IN INDONESIA. https://trendasia.org/wp-content/uploads/2022/04/The-Trouble-with-Gas-in-Indonesia-Final.pdf

Chicago

Trend Asia. THE TROUBLE WITH GAS IN INDONESIA. 2022. https://trendasia.org/wp-content/uploads/2022/04/The-Trouble-with-Gas-in-Indonesia-Final.pdf.

Wikipedia

{{cite report |author=Trend Asia |title=THE TROUBLE WITH GAS IN INDONESIA |date=April 2022 |url=https://trendasia.org/wp-content/uploads/2022/04/The-Trouble-with-Gas-in-Indonesia-Final.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{trendasia2022trouble, author = {{Trend Asia}}, title = {{THE TROUBLE WITH GAS IN INDONESIA}}, institution = {Trend Asia}, year = {2022}, month = apr, url = {https://trendasia.org/wp-content/uploads/2022/04/The-Trouble-with-Gas-in-Indonesia-Final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }