France and Indonesia Strengthen Cooperation in Supporting Energy Transition

On the occasion of his visit to Indonesia, Mr. Jean Yves Le Drian, Minister of Foreign Affairs and Europe, marked the strengthening of cooperation between France and Indonesia in the energy sector. Thus the Letter of Intent was signed by Mr. Basilio Dias Araujo, Deputy for Maritime Sovereignty and Energy Coordination, Mr. Zulkifli Zaini, President Director of PLN, Mr. Olivier Chambard, Ambassador of France in Indonesia and Mr. Emmanuel Baudran, Director of the French Development Agency (AFD) Indonesia Resident Mission before Minister Le Drian and Mr. Luhut Binsar Panjaitan, Coordinating Minister for Maritime Affairs and Investment. The Letter of Intent will focus on mobilizing 500 million euros to support Indonesia in its energy transition from fossil-based to cleaner and more efficient energy.

Over the past decade, Indonesia has experienced significant economic growth that has doubled its energy consumption, of which around 85% is supplied by fossil fuels. Indonesia pledged in 2015 to reduce its greenhouse gas (GHG) emission by 29% from the business as usual scenario, 41% with the support of the international community.

This commitment resulted in the announcement of a carbon neutrality plan in the energy sector in 2021, which will be achieved by 2050, the announcement of a moratorium on the construction of new coal power plants, and the publication of the PLN investment plan (RUPTL – Plan for the Provision of Electricity) 2021-2030, with the provisions that 52% of the new electricity production capacity installed during the period 2021-2030 will come from renewable energy.

To support this ambition, Indonesia and France are strengthening cooperation by mobilizing technical and financial support from the AFD Group – (French Development Agency) for the transition of energy and renewable energy in Indonesia, with an indicative amount of support of 500 million euros over the next 5 years.

This support will be in the form of grants for technical assistance in project preparation and implementation, soft loans to the Indonesian government and PLN, or even loans to the private sector for renewable energy and energy efficiency investments. Over the past 10 years, AFD has mobilized 520 million euros to support Indonesia in energy sector reform, public investment financing, and mobilization of experts from France.