Twenty billion dollars is what Indonesia, the fourth most populous country in the world, should receive from a group of rich countries and international institutions to reduce its dependence on coal.
The announcement was made by the White House on the sidelines of the G20 summit of major economies on the Indonesian island of Bali and in full COP27 in Sharm el-Sheikh. The participating countries are the United States, France, Canada, and the United Kingdom.
This “partnership for a just energy transition follows another $98 billion plan benefiting South Africa, Africa’s leading industrial power.
Thanks to this agreement, Indonesia, the fourth most populous country in the world with 300 million inhabitants, will be able to advance by ten years its objective of carbon neutrality in the energy sector by 2050. The Indonesian Finance Minister Sri Mulyani Indrawati, present at the Bali summit, described this step as extraordinary and speaks of a powerful signal in the Pacific and the world.
The funding obtained over three to five years is shared equally between public and private, in the form of aid, loan guarantees, or private investment. The principle of this mechanism was launched Monday at a ceremony in Bali. As part of this partnership, Indonesia has also pledged to achieve a level of 34% renewable energy by 2030, double what the country has been aiming for so far.
She added that tens of millions of Indonesians are at risk from natural disasters due to climate change, especially those living in low-lying areas. She said she hoped that her country could thus “accelerate the transition to renewable energies”, anticipating the closure of coal-fired power plants while acknowledging that it was “not easy”, particularly because of the costs. And according to scientific data, the country could lose more than 2,000 islets by 2030 due to rising sea levels.
This is the second time that this mechanism has been put in place. After South Africa and Indonesia, other countries are candidates, such as Senegal, Vietnam, and India. Discussions are ongoing at COP27.