In 2023, Indonesia’s transition to a more sustainable and net-zero economy continues to gain momentum. A year after announcing the Just Energy Transition Partnership (JETP) and Energy Transition Mechanism (ETM) national platform initiatives, the country reached an important milestone in November with the launch of the JETP Integrated Investment and Policy Plan (CIPP). Positioned as a living document that reflects national priorities and evolving climate commitments under JETP, the CIPP sets out a decarbonization path for Indonesia’s electricity sector, outlines a just transition plan, and serves as the basis for advancing the $20 billion JETP to finance specific projects. .
CPI actively supports the development of this transition plan in many aspects. In addition to our role as knowledge partner for PT Sarana Multi Infrastruktur (PT SMI) managing the ETM national platform, we also provide analytical and editorial support to the JETP Secretariat and its Finance Working Group, including the “Energy” in the CIPP Finance Chapter transformation costs”.
In another key area of sustainable finance, CPI is continuing its work to establish a sustainable banking center in Indonesia. The center is envisioned as a collaborative platform involving financial institutions to foster a more conducive investment ecosystem for the development of innovative financing instruments and de-risking mechanisms for energy efficiency projects. To this end, CPI assesses the net-zero alignment of Indonesia’s power sector financing, the country’s transition classification, and opportunities to expand climate-related investments.
Below is a summary of CPI Indonesia’s ongoing work in climate finance tracker, sustainable finance and energy transition through 2024.
Climate Finance Landscape in Asia and the Pacific
Developed for the Asian Development Bank, the CPI assesses the climate finance landscape in Asia and the Pacific and provides disaggregated data for five subregions: Central and Western Asia, East Asia, South Asia, and Southeast Asia and the Pacific. To create a comprehensive landscape, we track climate finance flows by source (e.g., public and private), financing instruments (e.g., loans and grants), and use of funds (e.g., by adaptation and mitigation purposes and by sector). We also identified gaps in climate finance in the region.
Indonesia’s climate finance landscape: Financing Indonesia’s energy transition
In this briefing published by the Institute for Basic Services Reform, we examine the climate finance landscape in Indonesia, highlighting issues with continued coal financing and the lack of financial instruments to accelerate coal’s early retirement, as well as the role of the country’s green taxonomy in mobilizing private climate change A more effective tool for financing.
Inclusive climate finance: Improving access for marginalized people in Indonesia
Developed in partnership with Hivos Indonesia, CPI assesses Indonesia’s climate finance landscape and explores ways to mobilize investment to benefit marginalized populations. The report includes an assessment of financing solutions from public, private and philanthropic sources and explores potential drivers for mobilizing multiple sources of funding at scale.
Climate-related investments in Indonesia’s financial sector
Based on our finding that public and private financial institutions contribute only 15% of the climate finance needed to achieve Indonesia’s net zero goal, this report identifies opportunities to further expand climate-related investment, including mainstreaming sustainability principles into investment flows.
Net-zero adjustment for Indonesia’s power sector financing
This report explores the renewable energy capacity and financing gaps in the power sector, and opportunities to better align power sector financing with Indonesia’s commitment to achieve net-zero emissions by 2060.
The next phase of Indonesia’s green taxonomy: Transformation finance to support decarbonization
Indonesia must decarbonize rapidly while maintaining economic resilience. This report outlines key considerations and steps for adopting transition finance in the next version of the Indonesian Green Taxonomy (now known as the Indonesian Sustainable Finance Taxonomy) and how to deal with coal phase-out.
Indonesian Carbon Market: Hope or Hype?
In a commentary published by the Indonesian Center for Strategic and International Studies, we examine the challenges facing Indonesia's carbon market, including non-optimal price discovery and carbon budget scarcity, and how corrective measures to address these issues and strengthen the effectiveness of the carbon market are reducing the country's emissions. aspect
Indonesia JETP Comprehensive Investment and Policy Plan Key Points
CPI supports the Finance Working Group's input into the CIPP and provides editorial support to its JETP Secretariat, due to be launched in November 2023.
A cautious look at Indonesia’s JETP: a glass half full
In this article for The Interpreter from the Lowy Institute, CPI Indonesia Director Tiza Mafira shares her insights into the coordinated global response needed for Indonesia’s JETP to succeed
Capacity building and consulting work
A series of workshops were held in 2023 to raise awareness of the JETP and facilitate dialogue between civil society organizations and government stakeholders to jointly develop Just Transition plans for Indonesia’s regions. To specifically assess the preparedness and capabilities of rural communities in eastern Indonesia, we conducted a preliminary study in four villages in East Nusa Tenggara (Mata Redi, Treweng, and Watukarere) and East Kalimantan (Muara Enggelam). Additionally, CPI Indonesia Director Tiza Mafira was recently appointed to the ClimateWorks Foundation Just Transition Fund Advisory Panel. Firmly rooted in just transition work in the Global South (South Africa, Vietnam and Indonesia), the Fund aims to promote just and equitable principles for the transition from coal to renewable energy.
What’s next for Indonesia Consumer Price Index Fund (Yayasan CPI)?
In 2024, CPI Indonesia will continue its efforts to create an enabling environment for the net-zero energy transition while creating a sustainable banking hub to optimize the mobilization of related financing.
To support these two critical workflows, we will conduct the following research:
- Industrial decarbonization (solar investment, renewable energy supply chains and green hydrogen),
- Greening the transmission and distribution network,
- mainstreaming of the sustainable finance taxonomy, and
- As a knowledge partner for GFANZ Asia Pacific's South East Asia Public Policy Engagement Workstream, we develop transition planning for financial institutions.
CPI Indonesia will also organize multi-stakeholder dialogues and produce research papers, columns and podcasts as part of our upcoming Climate Finance and Economics Programme, which aims to provide governments with insights on using scarce public funds to leverage private capital to achieve sustainable development. Policy recommendations for sustainable development.
we are happy to heard from you Your top priorities for 2024.
