Indonesia excludes off-grid coal from US$21.5 billion funding

INDONESIA will confine its spending plans for its historic US$21.5 billion climate aid package to on-grid power, punting on the issues presented by the growing fleet of coal-fired plants that service industrial sites in remote areas.

In a revised Comprehensive Investment and Policy Plan released for public review on Wednesday (Nov 1), the country also added a call for global philanthropic organisations to help fund the energy transition, particularly with money for projects that, while necessary, don’t often generate market returns.

The 327-page document lays out how money promised by wealthy countries and a consortium of financial institutions. As of now, it’s not possible to articulate a viable path to stop using coal for off-grid power, it says.

“While the off-grid captive power systems are outside of the scope of the current CIPP, the government of Indonesia and international partners group share a strong commitment to identifying and implementing viable solutions going forward,” the document says.

The rapid rise of dedicated, “captive” coal-fired plants has been a thorny issue for the country. It is also the world’s largest exporter of thermal coal, creating a dependency on coal that is greater and more complex than all sides to the climate aid negotiations initially acknowledged.

For its on-grid power sector, Indonesia set its emission target of 250 million tonnes of C02 by 2030, en route to net zero by 2050. It’s also aiming for renewable energy to make up 44 per cent of energy generation by 2030, up from 12 per cent in 2021. BLOOMBERG