Indonesia’s Initiative to Advance Green Energy through Green Energy Buyers Dialogue
The Green Energy Buyers Dialogue serves as a multi-stakeholder forum for the Just Energy Transition Partnership (JETP), uniting representatives from the Government of Indonesia (GoI), the International Partners Group (IPG), the Glasgow Financial Alliance for Net Zero (GFANZ), international and domestic banks, and industry leaders. The dialogue reaffirms Indonesia’s commitment to expand its renewable energy projects nationwide by fostering collaboration across sectors. Additionally, it aims to attract global investors to contribute financial capital for the infrastructure and technology necessary for green energy adoption in the industrial sector.
Rachmat Kaimuddin, Deputy for Infrastructure and Transportation Coordination of the Ministry of Maritime Affairs and Investment, emphasized the critical need for an energy transition to mitigate global climate change. He underscored the importance of shifting to green energy as the Indonesian government recognizes the climate crisis as a serious threat to its population of 280 million.
“This urgency requires us to change, and the solution to the climate crisis is a robust energy transition. We must move from fossil fuels to zero-carbon, non-fossil energy sources without compromising economic growth,” stated Rachmat.
The dialogue started with the industrial sector demonstrating strong demand for green energy and expressing full support for Indonesia’s decarbonization efforts. Industries even asserted their willingness to purchase more green energy if more options are made available. However, the industries require significant support from renewable energy-related regulations and infrastructure. One participating company suggested implementing incentives for early adopters (the "carrot") and penalties for those who fail to comply with regulations (the "stick") to encourage further industry compliance with sustainability goals.
As one of the representatives of the GoI at the dialogue, PT PLN (Persero) (PLN) is ready to meet the green electricity demand from the industrial sector in Indonesia. PLN has launched Green Energy as a Service (GEAS) as a commitment to providing clean electricity from new renewable energy-based power plants. Currently, PLN offers two schemes under the GEAS, including Renewable Energy Certificates (REC) and dedicated green energy sources.
PLN further outlined its ongoing development of a green energy ecosystem and sought feedback from stakeholders to strengthen its initiatives. PLN has proactively supported Indonesia’s energy transition through various renewable energy projects. By 2023, PLN had developed 8,786 megawatts (MW) of renewable energy capacity (Table 1).
Table 1. Renewable Energy Capacity Development by PLN as of 2023
| Type of Renewable Energy | Capacity (MW) |
| Hydro-based power | 5,777 |
| Geothermal | 2,519 |
| Solar, wind, and biomass | 490 |
| Total Renewable Capacity | 8,786 |
The GoI aims to enhance the clean energy mix to 75% renewable energy and 25% gas by 2040, outlining a strategic shift in Indonesia’s energy portfolio, as guided by the National Electricity Supply Business Plan (RUPTL) and the National Electricity Master Plan (RUKN). PLN CEO Darmawan Prasodjo stated that from this moment until 2040, the company planned to add 21 gigawatts (GW) from gas power plants, 28 GW from solar and wind, 31 GW from hydropower and geothermal, and 2.4 GW from other new energy sources.
To meet these ambitious targets, PLN has launched the Accelerated Renewable Energy Development (ARED) scenario, which includes building a Green-Enabling Transmission Line to facilitate renewable energy distribution across Indonesia. However, Darmawan also highlighted the substantial technical, policy, commercial, and financial challenges of meeting such targets. He called for strong collaboration with the global community.
IPG representative, Alexia Latortue, the Assistant Secretary of the Treasury for International Markets in the U.S. Department of the Treasury, highlighted the environmental and economic benefits of accelerating the energy transition. According to her, the green transition in Indonesia could attract investment and create new jobs.
“A green transition will clearly attract new investment to this country. Many companies represented here today have their own net-zero targets, and they’re seeking green energy sources. Countries that can offer these sustainable energy options will hold a competitive advantage,” said Alexia.
Head of the JETP Secretariat, Paul Butarbutar, stated that JETP and other global partners are prepared to provide funding for green projects developed by PLN and fully support the development of Indonesia’s renewable energy ecosystem. Paul highlighted JETP’s priority projects as per this dialogue to showcase the support JETP has been providing (Figure 1).
Figure 1. JETP Priority Projects as of July 2024
| No | Sponsor | Project | IFA | Details |
| 1 | PLN | South Sulawesi Transmission Line 275KV | New IFA 2 | Develop transmission lines and substations in Sulawesi, built to connect systems that have been isolated, forming a transmission backbone to channel large amounts of energy to the center loads that are located far apart, and to connect into larger system (interconnection) from South to Southeast Sulawesi. |
| 2 | IPP | Early Retirement of CFPP Cirebon-1 | New IFA 5 | Due diligence is being undertaken to assess possibilities to early retire the 660 MW Cirebon-1 CFPP. Term sheet has been agreed upon between Asian Development Bank and PT Cirebon Electric Power. Government deliberation is underway to enable PPA amendment. |
| 3 | IPP | Ijen Geothermal | New IFA 3 | Co-financing for a loan facility to PT Medco Cahaya Geothermal between PT SMI and DFC to develop Phase 1 of the 31 MW Ijen geothermal project in Banyuwangi, East Java. Financing agreement has been signed between MCG & SMI last year whilst DFC has recently signed its commitment for financing with financial close targeted by mid-year 2024. |
| 4 | PLN | Hululais Geothermal | New IFA 3 | Hululais 1 and 2 is a geothermal power plant with capacity of 110 MW in Bengkulu, Sumatera. Conditional upon LCR, JICA targets to reach financial close by August 2024. |
| 5 | IPP | Muara Laboh Geothermal | New IFA 3 | Muara Laboh is a geothermal power plant with capacity of 140 MW, located in Solok Selatan, Sumatera Barat. |
| 6 | IPP | Procurement Hydro | New IFA 3 | PLN is currently evaluating proposals from IPP for the procurement of hydropower projects with the capacity of 400 MW in Sulawesi and 250 MW in Sumatra. |
| 7 | IPP | De-dieselization | New IFA 4 | De-dieselization is PLN flagship program to replace 5,200 MW of its diesel power plants in 2,100 location into renewable energy. Through the de-dieselization program, Diesel Power Plants (PLTD) which previously served the needs of communities in isolated areas, will gradually be shifted to a hybrid method utilizing new renewable energy (EBT) from Solar Power Plants (PLTS). |
| 8 | PLN Indonesia Power with Partners | Hijaunesia 1 & 2 | New IFA 4 | VRE expansion program led by PT Indonesia Power. The program comprises a total of 17 Solar PV, floating Solar PV and Wind Power offered in 2020 and 2023. Three have been dropped and the remaining 14 projects are now part of the JETP Priority Projects. All 14 projects are in the process of finalizing PPA and securing financing, with some of them going through an accelerated process. Details forthcoming. |
| 9 | PLN Nusantara Power with Partners | PLTS Sutami/ Karangkates | New IFA 4 | Auction concluded and winner announced. Joint venture building and PPA negotiation in progress. |
| 10 | IPP | PLTB Tanah Laut | New IFA 4 | Co-financing between JICA, ADB and IFC of a 70 MW wind power plant in Tanah Laut, South Kalimantan. Financiers are conducting due diligence including environmental & social impact assessment. |
*Note: IFA stands for Investment Focus Area
“These are the lists of priority projects that we have discussed with our colleagues from the IPG and PLN. We would be pleased if partners from the industry, associations, or developers are interested in having their projects financed,” said Paul.
The Green Energy Buyers Dialogue not only reinforces Indonesia’s commitment to renewable energy but also sets a transformative foundation for future cooperation with international partners. This dialogue exemplifies Indonesia’s proactive stance in the global green energy market, balancing economic growth with environmental responsibility. Through continued partnerships and investments, Indonesia is positioning itself as a leader in the renewable energy sector, paving the way for a sustainable future.
Read the PLN article here
