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Several Developed Nations, Allied Groups Come Together With $10B Backing For Indonesia's Efforts On Decarbonization

Benzinga · 11/15/2022 17:40
  • At a G-20 meeting, a $20 billion funding plan was announced aimed at helping Indonesia, the world's largest coal exporter, adopt renewable energy sources.
  • Developed countries, including the U.S. and some big banks, have backed the plan as part of efforts to help emerging economies decarbonize.
  • Analysts say $20 billion would be a start. Shifting Indonesia's economy away from fossil fuels would require energy-sector investments of at least $2 trillion by 2050, according to a recent report by BloombergNEF.
  • Wall Street Journal reported that Japan, the European Union, Canada, and other governments besides the U.S. are expected to provide $10 billion over three to five years under the plan. 
  • The rest of the funds are supposed to come from the private sector. 
  • The Glasgow Financial Alliance for Net Zero said members, including Bank of America Corp (NYSE: BAC), Citigroup Inc (NYSE: C), and HSBC Holdings PLC (NYSE: HSBC), worked on the plan.
  • The money will be used to invest in low-carbon energy so that 34% of Indonesia's power generation will be renewable by 2030—roughly double the rate of deployment currently planned. 
  • State Department officials said that investments in planned coal plants would be redirected to renewables and aims to close coal plants ahead of their intended lifespans.
  • The plan depends on overhauling Indonesia's power sector. State Department officials said enacting the plan would start after Tuesday's announcement while the Indonesian government considers potential policy changes.
  • That should involve setting up a competitive power-procurement system and speeding up wind and solar permits, a State Department official said.