Rich countries pledged Tuesday to raise at least $20 billion to help wean Indonesia off coal and reach carbon neutrality by 2050, a decade earlier than planned, the White House said.
The United States, Japan, Canada and six European countries signed the agreement with Jakarta on the sidelines of the G20 summit in Bali to ensure a “just transition of the energy sector” away from Indonesia’s coal-dependent economy, they said in a statement from the union. White House.
Under the agreement, Indonesia, home to the world’s third largest rainforest, pledges to be carbon neutral by 2050 – 10 years earlier than previously planned – and to nearly double renewable energy generation by 2030.
Indonesian President Joko Widodo hailed the agreement, which follows a similar one for South Africa last year, as a model that could be replicated in other countries to achieve global climate goals.
“Indonesia is committed to using our energy transition to achieve a green economy and drive sustainable development,” he said, vowing that the deal would help “accelerate this transition.”
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The sponsors of the agreement said Jakarta has committed to an ambitious transition to clean energy for $10 billion in public sector financing and $10 billion in private financing over three to five years.
The financing included “grants, concessional loans, market-rate loans, guarantees and private investments” for the country, which has one of the world’s largest coal reserves.
US President Joe Biden said the deal shows that “countries can dramatically cut emissions and increase renewable energy while … creating quality jobs and protecting livelihoods and communities.”
– ‘Work in progress’ –
Indonesia has at times questioned climate agreements, including the 2021 agreement to end deforestation by 2030, warning that they could hinder the country’s economic development.
But despite the new incentives, experts warned there was still a lot of work for Indonesia to meet the requirements of the partnership.
“It’s a work in progress. But Indonesia has reached a sufficient comfort level with the amount of funding that they want to move forward. There will be a lot of follow-up work,” said Frederic Rudder, senior director for the EU and G20 at the NGO Global Citizen.
But he warned: “There is concern that funding is not sufficient for the full transformation required.”
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Indonesian officials welcomed the agreement despite concerns.
Indonesian Minister of Maritime Affairs and Investment Luhut Binsar Pandjaitan told a news conference that the deal shows “we can create a more sustainable world for our grandchildren, our citizens and the future generation.”
The donor pledge announced on Tuesday was part of a slew of projects announced under the Infrastructure Partnership – which aims to counterbalance China’s Belt and Road Initiative – to provide support to developing countries.
They ranged from financing digital projects in the Pacific, investing in sustainable mining of nickel and cobalt in Brazil, and running solar projects in Honduras.