As economies around the world recover from disruptions caused by the COVID-19 pandemic, countries have been doubling down to accelerate energy transition and achieve sustainability commitments. Energy transition has been a priority issue worldwide since the 2022 G20 Indonesian Presidency, which reached an agreement on the Bali Energy Transition Roadmap. In Indonesia’s case, the Indonesian government reached an agreement with advanced countries in the International Partner Group (IPG), led by the United States and Japan, to launch the Indonesia Just Energy Transition Partnership (JETP) which acquired US$ 20 billion commitment to finance Indonesia energy transition. Indonesia is also a member of the Japan-led Asia Zero Emission Community (AZEC), that seeks to help each member country achieve their net zero emission (NZE) targets by recognizing each member’s unique circumstances, policies, and development challenges. Indonesia has a target to achieve NZE in 2060 or earlier.

Indonesia’s electricity sector is guided by state electricity company PLN’s long-term electricity procurement plan (RUPTL) which also become national electricity supply business plan. In the commitment to achieve net zero emission (NZE) in 2060 or earlier, PLN as the solely electricity state own enterprise recently launched an accelerated renewable energy development (ARED) program which will be deployed in upcoming RUPTL with very ambitious target (39 GW renewable capacity addition by 2040) and requires massive investment (US$166 billion).

The biggest foreign investors in Indonesia’s energy sector, especially in electricity, have been those from China, Japan, and South Korea (CJK). These three East Asian countries are the biggest backers of CFPPs in Indonesia and the world. Globally, CJK countries are responsible for 95% of the funding for CFPPs that came from outside the countries where the plants are located.

Meanwhile, focusing specifically on Japan, the country is not only a co-leader of the Indonesia JETP and initiator of the AZEC but also a powerhouse in the renewable energy industry. Japan has become a significant player due to its variety of renewable energy sources with immense potential, including geothermal, hydropower, and wind. Notably, solar energy accounts for a substantial portion of the country’s new energy generation, positioning Japan at the forefront of the global photovoltaic market with 45% of photovoltaic cells manufactured in the country. Moreover, the country has been pushing what it calls “zero-emission thermal energy”, supporting the expansion of ammonia co-firing in coal-fired power plants, alongside CCS and biomass.

With Japan’s strength in renewable energy and financing, Indonesia has been seeking Japan’s investment in its renewable energy sector.  

Japan RE Invest Indonesia is a multi-stakeholder platform to bring together renewable energy (RE) stakeholders from Japan and Indonesia, particularly RE investors and financiers from Japan and RE project owners from Indonesia to increase investment into Indonesia’s RE sector. Tenggara Strategics and CSIS, together with the Indonesian Embassy in Tokyo (KBRI Tokyo) have conducted the 1^st Japan RE Invest Indonesia 2021 and the 2^nd Japan RE Invest Indonesia 2022 virtually, as well as the 3^rd Japan RE Invest Indonesia 2023 in a hybrid format and attracted a total of 828 participants from 473 institutions from Japan and Indonesia.