Indonesia, France and the EU strengthen their partnership to accelerate Indonesia’s energy transition

On 1st November 2024, Indonesia’s Ministry of Energy and Mineral Resources (MEMR), and Agence Française de Développement (AFD) strengthened their cooperation to accelerate Indonesia’s transition to a more sustainable energy sector, with the financial support of the European Union (EU).

A Letter of Intent and an Implementing Agreement signed by MEMR Secretary General Dadan Kusdiana and AFD Country Director Yann Martres formalised both parties’ Energy Transition Cooperation programme. These agreements expand the cooperation between France and Indonesia on the energy sector, in line with France’s EUR 500 million commitment to the Indonesia Just Energy Transition Partnership (JETP), and with the crucial financial support of the EU.

“As a nation deeply vulnerable to the impacts of climate change, Indonesia recognises the urgent need to reduce greenhouse gas emissions and diversify its energy mix. To achieve these ambitious goals, it is expected that collaboration with global partners will enable Indonesia to access cutting-edge technologies, financial resources, and technical expertise” said Secretary General Dadan Kusdiana.

The Secretary General mentioned that cooperation between MEMR and AFD marks the importance of collective efforts between Indonesia and France, who have become partners in overcoming climate change and transition challenges, towards a sustainable energy future.

“Identified as a key priority by France and Indonesia, the cooperation on the energy transition can leverage each country strengths to forge a path towards a sustainable and just energy future. By improving the cooperation on the energy transition, we can drive not only technological advancements but also significant economic growth, job creation, and energy security,” said French Embassy Chargé d’affaires a.i. Laurent Legodec.

Set to begin in 2025, this five-year cooperation programme will be funded by AFD and the EU through the Indonesia Energy Transition Facility (IETF). The initial amount of the grant will be EUR 3 million, with the possibility of a top-up of the grant amount to finance additional activities identified along the implementation of this support. The cooperation programme aims to advance Indonesia's energy transition agenda by providing strategic support across several key areas including decarbonisation for small islands, green hydrogen development, sustainable mining of critical minerals and sustainable production of bioenergy.

“The EU is delighted to provide catalytic grant financing to AFD to work with the Ministry of Energy and Mineral Resources on Indonesia’s green and clean transition. Indonesia matters. Its strategic location and vast natural resources, including nickel reserves and geothermal energy potential, make it a key player in the global green transition. Nations must engage with those that can make a significant effort to the world’s trajectory, and with a population of 280 million, Indonesia is positioned to do just that. We are pleased to partner with Indonesia and AFD in this endeavour,” said EU Ambassador to Indonesia, H.E. Denis Chaibi.

The programme will support mainstreaming and embedding a just energy transition across different policy initiatives. It will also promote public policy dialogue within MEMR through studies and policy briefs, ensuring alignment with Indonesia’s energy transition priorities and enhancing coordination with other development partners.

By supporting the development of an enabling environment for the acceleration of renewable energy deployment, this programme between AFD and MEMR will also contribute to the objectives of French support to acceleration of phasing out coal in a just and orderly manner, and Global Gateway, an EU strategy to foster hard and soft infrastructure globally.

“The signing of the Letter of Intent and Implementing Agreement on Energy Transition Cooperation between MEMR and AFD illustrates our long-term partnership towards the ambition of Indonesia in achieving net zero emissions and transitioning its energy sector,” said AFD Country Director Yann Martres.

These agreements reaffirm the commitment of MEMR and AFD to work together towards a greener and more resilient energy sector in Indonesia, addressing social, environmental, and economic challenges along the way.

AFD

* * *

About AFD

Agence Française de Développement (AFD) Group finances, supports and accelerates the transitions necessary for a more just and resilient world. It thus contributes to implementing France’s policy on sustainable development and international solidarity. It is with and for communities that we build, with our partners, solutions in more than 160 countries, as well as in 11 French overseas departments and territories.

Our objective: to reconcile economic development with the preservation of common goods (the climate, biodiversity, peace, gender equality, education and health). Our teams are involved in more than 3,600 projects in the field, which are part of the commitment of France and the French people to fulfilling the Sustainable Development Goals (SDGs). For a world in common.

AFD started its operations in Indonesia in 2007 with a mandate focusing on the fight against climate change. Since then, it has mobilised more than EUR 3.5 billion of financing in Indonesia, aiming at contributing to the achievement of the SDGs and to preserve common good. www.afd.fr/en

About the EU

The European Union (EU) is the economic and political union of 27 Member States. Together, the EU has built a zone of stability, democracy and sustainable development while maintaining cultural diversity, tolerance and individual freedom. In 2012, the EU was awarded the Nobel Peace Prize for advancing the goals of peace, reconciliation, democracy and human rights in Europe. The EU is the world's largest trading bloc, and the world's largest source and destination of foreign direct investment. Collectively, the EU and its Member States are the largest donors of Official Development Assistance (ODA), providing more than half of ODA globally.

The 27 Member States of the EU (in protocol order) are: Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.

For more information about the EU and its relations and cooperation with Indonesia, access: http://eeas.europa.eu/indonesia

About Global Gateway

Global Gateway is the EU's positive offer to reduce the worldwide investment disparity and boost smart, clean and secure connections in digital, energy and transport sectors, and to strengthen health, education and research systems.

The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States, and European development finance institutions. Together, we aim to mobilise up to €300 billion in public and private investments from 2021 to 2027, creating essential links rather than dependencies, and closing the global investment gap.