Indonesia on Feb. 16 launched the long-awaited Just Energy Transition Partnership (JETP) Secretariat, located in the Energy and Mineral Resources (ESDM) Ministry building, that will oversee the mobilization of US$20 billion from the international partner group countries (IPG), co-led by the United States (US) and Japan, to accelerate the country’s energy transition.

The JETP governance structure consists of three levels, namely the policy layer, the coordination layer and the transaction layer. The policy layer involves the Indonesian decarbonization task force and the IPG task force, which are tasked with organizing a working group to accelerate the JETP energy transition programs, namely the electricity generation system, financing, decarbonization of the power sector, supply chain and manufacturing, as well as a socially just energy transition.

Meanwhile, the JETP secretariat is the layer that coordinates directions from the task force teams and their technical implementation, including JETP projects and financing. The JETP secretariat is the center for information, planning and coordination, as well as monitoring and evaluation of the implementation of the JETP projects.

Lastly, in the transaction layer, state-owned infrastructure financing company PT Sarana Multi Infrastruktur (SMI) is the country platform, which acts as the fund manager that will partner with the Glasgow Financial Alliance for Net Zero (GFANZ) consisting of Bank of America, Citibank, Deutsche Bank, HSBC, Macquaire, MUFG and Standard Chartered, as well as other multilateral development banks. The appointment of PT SMI as the country platform manager has been stipulated by Finance Ministerial Regulation No. 275/2022.

The types of projects under JETP include early retirement of coal-fired power plants (PLTU), development of renewable energy power plants, electricity grid or transmission, renewable energy supply chain, energy efficiency and just transitions. Meanwhile, Energy and Mineral Resources Minister Arifin Tasrif said Carbon Capture Storage/Carbon Capture Utilization Storage (CCS/CCUS) will not be a part of the partnership.

For PLTU early retirement, coordination between Indonesian and international stakeholders for a pilot project has been carried out, involving the support of the Office of the Coordinating Maritime Affairs and Investment Minister, state-owned electricity company PLN, the Energy and Mineral Resources Ministry and the Finance Ministry’s Climate Action Fund-Accelerating Coal Transition (CIF-ACT).

Within the next six months, the secretariat will have to develop a comprehensive investment and policy plan that will lay out the country’s steps for a just energy transition. However, there has been criticism of the secretariat and institutions involved due to a lack of information on what projects are under negotiation to be part of the JETP scheme other than the early retirement of PLTUs. Furthermore, there has also been no information regarding how much of the $20 billion investment fund will be given as grants or concessional loans, raising concerns over debt incurred from the partnership.