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Joint Statement by the Government of the Republic of Indonesia and International Partners Group members on the Indonesia Just Energy Transition Plan

Joint Statement by the Government of the Republic of Indonesia (GOI) and the Governments of Japan, the United States of America, Canada, the Kingdom of Denmark, the European Union, the Republic of France, the Federal Republic of Germany, the Republic of Italy, Norway, United Kingdom of Great Britain and Northern Ireland (together the “International Partners Group” or IPG).

Recognizing the need for accelerated action toward Agenda 2030, including Sustainable Development Goal 7, and the goals of the Paris Agreement, as well as implementation of the Glasgow Climate Pact, to avoid the worst impacts of climate change on our countries, our people, and the environment;

Recognizing that limiting the impacts of climate change by keeping a warming limit of 1.5°C above pre-industrial levels within reach depends on the international community collectively halving global CO2 emissions by 2030 relative to the 2019 level and achieving global net zero CO2 emissions by mid-century;

Underlining the urgency of decarbonizing energy systems by expediting a reduction in power sector emissions, increasing energy efficiency, and hastening renewable energy deployment, while strengthening efforts to reach universal, affordable, and reliable access to energy;

Recognizing the need to take actions to enable transition finance to support orderly, just and affordable transitions towards a low-greenhouse gas emissions and climate-resilient economy in line with the practical and voluntary recommendations of the transition finance framework in the 2022 G20 Sustainable Finance Report;

Recognizing the need to encourage the mobilization of private finance to support the transition to a net-zero emission world, to prevent the possibility of stranded assets;

Recognizing the importance of Environmental, Social, and Governance standards as a consideration for developing transition financial frameworks and the existing gap between current standards and energy transition needs;

Recognizing the importance of a just energy transition that brings about opportunities for industrial innovation to create quality green jobs, and considers all communities and societal groups affected directly or indirectly by an expedited reduction of power sector emissions—through early retirement of coal-fired power plants—including women, youth, and others vulnerable to the transition; and that there are several important sectors of Indonesia's economy that are impacted by such a transition;

Noting that the Just Energy Transition Partnership (JETP) can alleviate poverty and unemployment and also should see to provide robust protection for the population, especially the poorest and the most vulnerable to potential disruptions from energy transitions;

Further underlining that a just process of transition is based on the full involvement of relevant actors including organized labour and business to implement human capital development programs through reskilling and upskilling, creating employment and providing other forms of collaboration so that workers are major beneficiaries of the transition to a greener future;

Recognizing and acknowledging Indonesia's important contribution to the global efforts in climate change mitigation, including the progress the Government of the Republic of Indonesia, as well as State Owned Enterprises, are already making towards a net zero future by preparing a Long-Term Strategy for Low Carbon and Climate Resilience to 2050; committing to economy-wide net-zero emissions by 2060 or sooner; enacting the Presidential Decree on Renewable Energy; working to reduce the pipeline of on-grid coal fired pipeline; and working to develop and implement necessary polices, laws, and regulations in both the energy and financial sectors to enable renewable energy deployment as well as to phase down subsidies for domestic coal supply and energy tariffs;

Acknowledging the establishment of a country platform to manage some funds as necessary related to energy transition under PT Sarana Multi Infrastructure (PT SMI), a Special Mission Vehicle (SMV) of the Ministry of Finance;

Recognizing Indonesia's intention to be an early leader of the just energy transition, its endeavour to receive the benefits of renewables while minimizing economic and social costs of the green transition, and the importance of global collaboration;

Recognizing the need for long-term cooperation and partnership, given the decades-long timeframe needed to enact a sustainable and just energy transition, and noting the ability to extend the partnership beyond the initial three-to-five-year period;

Recognizing the importance of continuing to scale up collaboration, including finance from a wide variety of sources, technical assistance, and human capital development for Indonesia's efforts;

Acknowledging that the JETP aims to provide an opportunity for Indonesian companies to improve their capacities and become part of the manufacturing value chain for clean energy solutions, including renewables and energy efficiency;

Recognizing the need for enhanced financing to pursue the above objectives, which potentially comes from IPG, additional sources of sustainable financing and the inclusion of international partners to leverage existing international initiatives, e.g., the G7 Partnership for Global Infrastructure and Investment;

Supporting the Climate Investment Fund's Accelerating Coal Transition Investment Program and the Asian Development Bank's Energy Transition Mechanism; and

Recognizing Indonesia's commitment as the G20 Presidency in 2022 to reiterate global support for the energy transition in three priority areas namely energy access, technology, and finance, to achieve better economic growth that is inclusive, sustainable, and equitable.

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