In order to support Indonesia’ shift towards sustainable energy, AFD has designed the technical assistance programme Indonesia Energy Transition Facility (IETF). This programme, financed by the European Union (EU) and France, will support the Just Energy Transition Partnership (JETP), especially France’s financial pledge of 500 million euros loans. This five-year programme, running from 2025 to 2030, is funded by EUR 15.1 million of grants. EU provided EUR 11 million of the grant amount (including EUR 10.6 million available for Indonesian counterparts) while AFD will contribute the remaining EUR 4.1 million.

The IETF programme is structured into two components that are essential to develop just energy transition in Indonesia:

1. Support to the energy policies; and

2. Preparation of renewable energy and transmission projects.

The component 1, “Support to energy transition public policies with the Ministry of Energy and Mineral Resources (MEMR)”, will aim to facilitate the just energy transition in terms of regulations in the energy sector itself and the related environmental, social and gender aspects of it. This will encourage investments from the private sector in renewable energy and an environmentally and socially sustainable framework for the energy transition. To strengthen the JETP public policy dialogue, IETF will provide to the MEMR an energy policy advisor that will support and broaden the on-going just energy transition reforms undertaken by the Ministry. Technical assistance for public policy dialogue will support policymakers to make informed decisions on energy transition, fostering an enabling environment for renewable energy.

• The first subcomponent is the support to energy transition reforms through studies and trainings. IETF will more specifically work on green hydrogen, providing a study tour as well as a study on hydrogen hubs development in Indonesia. It will as well focus on islands and provinces decarbonization by working on a decarbonization pathway as a case study. Sustainable bioenergy policies will also be supported through trainings and studies, with a focus on agricultural residues to provide electricity or combined heat and electricity.
• The second subcomponent focus on environmental, social and gender challenges. Activities will be organized to improve ESG framework in the energy sector via MEMR and develop MEMR internal capacity for implementation of the ESG framework. In addition, IETF will provide training on sustainability in critical mineral mines and a mapping of South-East Sulawesi sustainable critical minerals.
• The last subcomponent relates to donor coordination reinforcement at MEMR.

The component 2, “Project preparation and implementation, institutional support and capacity building for the energy SOEs (State Owned Enterprises)”, will contribute to develop a portfolio of renewable energy projects, aligned with best environmental and social practices, and scalable, in order to achieve JETP targets of renewable energy deployment. IETF will support project preparation and implementation with PLN, both of AFD’s already identified projects and of new projects in transmission, hydroelectricity, bioenergy or other renewable energy. It will also support the preparation of a geothermal power plant developed by Geo Dipa Energi. In addition, IETF will provide an institutional support and capacity building with various energy SOEs.

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