Japan to disburse JPY 2bn in Indonesia to fund accelerated energy transition.

Jakarta – The Japanese government has agreed to provide 2 trillion yen annually, or USD 13.5 billion, to help accelerate the energy transition in Indonesia.

The matter was agreed during a meeting between the Coordinating Minister for Economic Affairs Airlangga Hartarto, Chairman of the Board of Directors of the Japan Bank of International Cooperation (JBIC), and Special Advisor to the Japanese Cabinet Tadashi Maeda in Jakarta. Airlangga revealed that Japan will disburse funding to accelerate the energy transition for cooperative projects in the task force.

“Through JBIC and METI, the Japanese government will roll out a Green Innovation Fund of two trillion yen per year,” said Hartarto in a written statement.

Joint Crediting Mechanism

In addition to agreeing on establishing a task force, Airlangga and Maeda also discussed a Joint Crediting Mechanism (JCM) and other potential projects to be implemented under the Asia Zero Emission Community (AZEC).

The JCM scheme has an essential role in helping formulate national policies on carbon pricing and is the most feasible cooperation between Indonesia and Japan for carbon mitigation.

Currently, Indonesia intends to launch a carbon exchange that allows various types of carbon to be traded. With Japan’s support of JCM, Indonesia can implement as many as 54 JCM projects and conduct at least 150 feasibility studies on carbon emission reduction programmes.

During the meeting, several potential sectors were also discussed, including the development of a hydropower plant in Kayan, North Kalimantan, to replace coal-powered plants in Java, the development of efficient technology for geothermal power plants, Carbon Capture, Utilization, and Storage (CCUS), blue urea and revitalisation of peat areas with Japanese technology. (Hartatik)

Banner photo: Coordinating Minister for Economic Affairs Airlangga Hartarto Doc. The Coordinating Ministry met with representatives of the Japan Bank of International Cooperation (JBIC) and the Japanese government in Jakarta. (Source: Coordinating Ministry for Economic Affairs)