European Union and AFD Collaborate to Support Indonesia’s Energy Transition with €6.5 Million Grant
The European Union (EU) and the Agence Française de Développement (AFD) have jointly awarded a €6.5 million (Rp110 billion) grant to PT PLN, Indonesia’s leading state energy utility company. This financial support aims to bolster Indonesia’s energy transition efforts, aligning with global initiatives to combat climate change.
Key Partners Announce Launch of Indonesia Energy Transition Facility (IETF)
The Indonesia Energy Transition Facility (IETF) was officially launched on February 5, 2025, by the Embassy of France in collaboration with the European Union. This facility is designed to channel funding from global institutions to facilitate diverse energy transition projects in Indonesia.
PLN’s Commitment to Sustainable Energy
Darmawan Prasodjo, President Director of PLN, emphasized the importance of global collaboration in addressing climate change. “This partnership is a clear demonstration of the international community’s commitment to tackling the global climate crisis,” Darmawan stated.
PLN recognizes the value of this contribution from AFD and the French Government. The utility company intends to leverage this support to enhance its renewable energy generation and transmission projects, while also bolstering its institutional capacity to meet its Net Zero Emission (NZE) target by 2060.
Financial Framework for Energy Transition
Sinthya Roesly, PLN’s Finance Director, clarified that the €6.5 million grant from the IETF framework will be dedicated to advancing PLN’s decarbonization program. This financial injection will cover technical assistance for renewable energy initiatives, alongside strategies to bolster PLN’s energy transition efforts.
According to Sinthya, “The energy transition not only aids in reducing carbon emissions but also fuels economic growth by attracting investments, creating jobs, and strengthening local industries.”
International Partners Highlight Significance of IETF
Fabien Penone, French Ambassador to Indonesia, Timor-Leste, and ASEAN, noted that the IETF launch is a critical step in accelerating Indonesia’s energy transition. “This facility will serve as a key platform for international financial institutions like AFD to support various projects aimed at sustainable energy transformation in Indonesia.”
The energy transition, Fabien added, is a multifaceted challenge requiring substantial investments, robust partnerships, innovation, and long-term commitment to achieve a balance among environmental, economic, and social aspects.
EU and AFD’s Ongoing Support
Diana Acconcia, Director of International Affairs and Climate Finance at the European Union’s Directorate-General for Climate Action (CLIMA), acknowledged the role of the IETF in accelerating the transition towards clean energy. “The EU remains committed to supporting sustainable investments and fostering a climate that encourages sustainable economic growth and energy security in Indonesia.”
“Indonesia’s contribution to the global energy transition is crucial, and we are fully committed to working with Indonesia to achieve sustainable progress,” Diana assured.
AFD’s Role in Indonesia’s Energy Shift
Yann Martres, Country Director of AFD, highlighted AFD’s commitment to supporting Indonesia’s transition to more sustainable and inclusive energy systems. “Through this initiative, AFD, alongside the EU and its partners, reiterates its strategic role in combating climate change and aiding the Government of Indonesia’s efforts towards a just, sustainable, and inclusive energy transition,” Yann stated.
Impact of Energy Transition on Indonesia
As PLN and its international partners gear up for this significant transformation, the expected outcomes are far-reaching. The transition to clean energy is anticipated to create a ripple effect across Indonesia’s economic landscape, fostering growth, employment opportunities, and sustainable development.
With the collaborative efforts of these key players, Indonesia stands on the cusp of a sustainable energy future, poised to contribute meaningfully to global climate goals.
Conclusion
The €6.5 million grant from the EU and AFD marks a significant stride in Indonesia’s journey towards a sustainable energy future. By providing crucial financial and technical support, these international partners are helping PLN to accelerate its efforts in transitioning to clean energy and achieving Net Zero Emissions by 2060.
This collaborative initiative strengthens Indonesia’s position in the global energy transition, underscored by the commitment of both national and international stakeholders.
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