The United States, Indonesia and other allies signed a $20 billion deal on Tuesday at the Group of 20 (G-20) summit that will help Indonesia reduce its reliance on coal.
The goal of the agreement, called the Just Energy Transition Partnership (JETP), is to help Indonesia reduce emissions and transition away from fossil fuels to renewable energy. The U.S. and Japan co-led the deal, which was also signed by Canada, Denmark, the European Union, France, Germany, Italy, Norway and the United Kingdom.
Indonesia, which is hosting the G-20 in Bali and is the world’s third-largest producer of coal, will develop an investment plan to achieve new targets, such as establishing a goal to reach net zero emissions in the power sector by 2050. That goal would reduce Indonesia’s net zero power sector emissions target by 10 years.
The nations also aim to accelerate Indonesia’s “deployment of renewable energy so that renewable energy generation comprises at least 34 percent of all power generation by 2030, which would roughly double the total renewables deployment over the course of this decade compared to current plans,” according to a White House statement.
President Biden on Tuesday announced the partnership, which he said is designed “to support Indonesia’s efforts to reduce emissions,” at an event he co-hosted with President Joko Widodo of Indonesia and President Ursula Von der Leyen of the European Commission about infrastructure investments in Bali.
The $20 billion JETP deal will include $10 billion in public sector pledges from participating governments, including the U.S. The other $10 billion is expected to come through private investments. The deal included a commitment from big banks to work to mobilize and facilitate $10 billion in investments, and the initial set of private financial institutions includes Bank of America, Citi, Deutsche Bank, HSBC and others.
“Indonesia has shown tremendous leadership and ambition throughout the development of this partnership. The resulting new and accelerated targets demonstrate how countries can dramatically cut emissions and increase renewable energy while advancing a commitment to creating quality jobs and protecting livelihoods and communities,” Biden said in a statement.