Indonesia’s Just Energy Transition Partnership

The report analyzes the I-JETP's goal of mobilizing $20 billion for Indonesia's energy transition, framing it as an initial 'downpayment' for a much larger requirement potentially exceeding $200 billion over 15 years. It identifies a '3+1' funding strategy involving international public, international private, domestic private, and domestic public capital. Key challenges include rising global interest rates increasing the absolute cost of renewables, the need for significant grid/transmission upgrades, and the necessity of policy reforms regarding power purchase agreements and the role of the state utility PLN. The author argues that success depends on the Government of Indonesia's commitment to policy predictability and the international community's willingness to provide concessional financing that ensures electricity affordability.

• The I-JETP's target of $20 billion is an initial phase that is significantly lower than the total investment needed for Indonesia's broader transition; estimates for 2030 emissions reductions alone reach $243 billion, and total needs may exceed $200 billion over the next 10 to 15 years.
• Rising global interest rates have increased the absolute cost of borrowing and the 'all-in-cost' per installed megawatt for renewables, which threatens electricity affordability and reduces the amount of capacity that can be built with the I-JETP's $20 billion.
• Transmission and grid deployment are critical priorities due to Indonesia's fragmented geography across several islands, yet this sector struggles to attract private capital because of modest returns and high risk-adjusted targets.
• The state-owned utility PT Perusahaan Listrik Negara (PLN) holds a dominant monopoly over transmission and distribution and acts as the main procurer of electricity; its operational efficiency and financial reform are central to attracting investment.
• Policy and institutional barriers, specifically regarding power purchase agreement (PPA) frameworks, renewable energy tariffs, and local content requirements, must be reformed to improve predictability for investors.
• There is significant untapped potential to redirect domestic resources toward the transition, including revenues from the national oil and gas company Pertamina and windfall profits from domestic coal mining companies.
• The success of the I-JETP depends on the Government of Indonesia's perceived commitment to reducing coal emissions, including both early retirement of plants and limiting 'captive' coal generation used for industrial purposes.
• Financial innovation is required to address the currency mismatch between foreign capital and local currency revenues, such as through exchange rate coverage facilities or carbon market mechanisms for transmission assets.

APA

Benoit, P., & Prasetiyo, A. (2023). Indonesia’s Just Energy Transition Partnership. Zero Carbon Analytics. https://zerocarbon-analytics.org//wp-content/uploads/2025/06/Indonesia-JETPFinal-version-ZCA.pdf

Chicago

Benoit, Philippe, and Andri Prasetiyo. Indonesia’s Just Energy Transition Partnership. Zero Carbon Analytics, 2023. https://zerocarbon-analytics.org//wp-content/uploads/2025/06/Indonesia-JETPFinal-version-ZCA.pdf.

Wikipedia

{{cite report |last1=Benoit |first1=Philippe |last2=Prasetiyo |first2=Andri |title=Indonesia’s Just Energy Transition Partnership |publisher=Zero Carbon Analytics |date=September 2023 |url=https://zerocarbon-analytics.org//wp-content/uploads/2025/06/Indonesia-JETPFinal-version-ZCA.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{benoit2023indonesias, author = {Benoit, Philippe and Prasetiyo, Andri}, title = {{Indonesia’s Just Energy Transition Partnership}}, institution = {Zero Carbon Analytics}, year = {2023}, month = sep, url = {https://zerocarbon-analytics.org//wp-content/uploads/2025/06/Indonesia-JETPFinal-version-ZCA.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }