Indonesia is looking for China’s assistance in developing renewable energy and infrastructure projects to reduce its reliance on coal and achieve its net-zero emissions goal by 2060. President Joko Widodo will attend the Belt and Road Forum in Beijing this week, where he will showcase a high-speed railway line funded by Chinese loans and discuss trade relations with Chinese President Xi Jinping.
Southeast Asia’s largest economy, Indonesia, is one of the world’s biggest coal consumers and greenhouse gas emitters. It has pledged to reach net-zero emissions by 2060 or sooner but faces challenges such as rising power demand, insufficient infrastructure, and social and economic impacts of the energy transition.
To help Indonesia decarbonize its energy sector, a group of countries led by the US announced a $20 billion Just Energy Transition Partnership (JETP) last year, which aims to provide grants, loans, guarantees, and private investments for renewable energy projects, energy efficiency measures, and early retirement of coal plants. However, the JETP talks have been slow and difficult, with Indonesian officials complaining that Western countries are reluctant to finance coal phase-out and that the loans carry high-interest rates.
Indonesia is also seeking China’s help for renewable energy and infrastructure projects under the Belt and Road Initiative (BRI), Xi’s flagship foreign policy that has invested hundreds of billions of dollars in building ports, bridges, highways, and power plants worldwide. China has been a major partner of Indonesia in the BRI, with projects such as the Jakarta-Bandung high-speed railway line, which is expected to be completed by 2024.
“China has made great strides in renewable energy development and has massive hydropower. So it would be good to learn from that,” acting Chief Investment Minister Erick Thohir said in a Reuters interview. He added that the two countries were still exploring what kind of partnership would be possible.
Indonesia is set to announce investment plans for JETP next month, ahead of the United Nations COP28 climate summit. Thohir said Jakarta was open to working with any nation willing to help it achieve its climate goals and believes in Indonesia’s economic potential, but any cooperation must be on Indonesia’s terms.
“We want this to fit our grand plan, the Indonesia blueprint, not the blueprint of other countries,” he said.
Indonesia’s pursuit of green energy projects with China could also boost its trade relations with its largest trading partner. China is Indonesia’s biggest export market, mainly for commodities such as coal, palm oil, and nickel. Indonesia hopes to increase its exports of value-added products such as electric vehicle batteries and reduce its trade deficit with China.
The Belt and Road Forum, which marks the 10th anniversary of the BRI, will be attended by leaders and representatives from more than 140 countries and international organizations. It will be China’s first time hosting an international event at this level since emerging from nearly three years of pandemic isolation.
The forum will also be an opportunity for China to showcase its role as an alternative global leader to the US, especially amid renewed conflict in the Middle East and ongoing tensions over Ukraine. China has been growing its influence and efforts to play a role in peace and development in these regions through the BRI.
Source: Reuters
