The Asian Development Bank (ADB) is providing its support for PT Pembangkit Listrik Negara (PLN) (Persero) in submitting funding for a project to convert a diesel power plant into a gas and steam power plant (PLTGU) through the Just Energy Transition Partnership Investment (JETP) program.
JETP funding has not been disbursed
Previously, US$ 20 billion (IDR 310 trillion) in JETP funding had been pledged by the United States (US), Japan, Canada, France, Germany, Italy and the United Kingdom (UK) and countries including Denmark, Norway, and Europe.
This funding has a higher nominal value than JETP’s energy transition capital contributions in Vietnam and South Africa, each worth US$ 15 billion and US$ 8 billion.
However, until now JETP funding has not been provided to Indonesia according to the promise of the G7 countries at the G20 in Bali in 2022.
PLN proposes funds from JETP
PLN applied for funding to help power plant conversion and plans to successfully complete funding from JETP by at least August 16, 2023.
Said Zaidansyah, ADB Deputy Country Director said that JETP’s climate funding program does not always accommodate capital for early retirement of coal-fired power plants (PLTU).
Dadan Kusdiana, Director General of New, Renewable Energy and Energy Conservation (EBTKE) from the Ministry of Energy and Mineral Resources (ESDM) said that the emission reduction project will certainly be obtained from JETP for the de-dieselization of fuel oil generators into PLTGU.
He believed that the process of disbursing JETP funds for the generator de-dieselization program will be successful. Currently, PLN has conducted the bidding stage of the diesel power plant conversion project (PLTD).
PLN targets the conversion of PLTD to PLTGU to operate in 2027, which will occur in two clusters, namely the Sumatra, Kalimantan, Java-Madura Clusters and the Sulawesi, Maluku, Papua and Nusa Tenggara Clusters.
“The project has been running, there has been an auction. So the funds just need to come in,” said Kusdiana, on June 19, 2023.
ADB opens up investment opportunities
Zaidansyah added that ADB is also opening up further investment for the development of power plants to support decarbonization steps through new and renewable energy (EBT).
“We support the conversion of coal-fired power plants into renewable energy because it is part of the energy transition mechanism,” he said on June 24, 2023.
ADB asserted that the Indonesian government is fully committed to improving the investment climate in EBT generator development projects.
This commitment helps build trust and interest among international investors and borrowers to invest in the country.
So far, ADB has signed a Memorandum of Understanding (MoU) for the early retirement of the Cirebon-1 Steam Power Plant (PLTU) with a capacity of 660 megawatts (MW) with funding of US$ 250-300 million (IDR 3.8-4.6 trillion) through the energy transition mechanism.
