(Bloomberg) — When Indonesia agreed last year to clean up its energy system with an estimated $20 billion of help from a coalition of wealthy countries and large financial institutions, world leaders hailed the deal as “extraordinary,” “realistic,” and “historically large.”
Almost 10 months later, as Southeast Asian leaders gather in Jakarta, the hosts have little to show off. A much-anticipated investment blueprint has been postponed. Parties have yet to agree on governance, baseline data or the funding required to curb greenhouse emissions and wean the world’s largest coal exporter off fossil fuels. The most ambitious of the Just Energy Transition Partnerships—the international finance projects designed to cut climate-warming emissions—is faltering.
One especially thorny issue is that Indonesia’s coal-dependency is greater and more complex than all sides initially acknowledged. A 362-page draft document reviewed by Bloomberg spotlights the rapid growth of a fleet of dedicated, “captive” coal-fired plants powering industrial expansion but not connected to the grid. Incomplete data, especially on new and planned facilities, means even the exact scale of the problem is unclear.
“The process started top-down,” said Edo Mahendra, chair of the secretariat tasked with turning the JETP, as the climate package is known, into reality. “Once we do the bottom up, all the devils that lurk in the details come out.”
How these issues are resolved will set a precedent for any future deals, determining to what extent the agreement can create “valuable lessons for the global community [that] can be replicated in other countries to help meet our shared climate goals through concrete collaborative actions,” as Indonesian president Joko Widodo put it in November, when he announced the deal in Bali alongside US President Joe Biden.
Indonesia is the biggest emitter in Southeast Asia by a long shot, thanks to vast coal reserves and a power-station construction boom over the past decade or so. But its regional neighbors and other emerging economies also depend on coal-fired plants that will need to be retired to prevent the worst consequences of global warming. Vietnam is advancing with its own JETP. Senegal struck a deal in June.
In the end, the outcome in Indonesia will also reflect on the credibility of countries that enriched themselves through coal and other fossil fuels for centuries and now cite the need for global emissions cuts. It will test the claims of big private financial institutions that the capital markets can create solutions to the world’s biggest problems.
Bloomberg reporters spoke with more than a dozen people with knowledge of the negotiations, most of whom asked to remain anonymous because the discussions are private and ongoing. They described deep gaps between all sides over even the most basic terms and the scope of the problem they have to fix.
The initial promise of peaking Indonesia’s power sector emissions by 2030 at no more than 290 million tons of carbon dioxide, about 20% below a baseline level for the year, looks out of the question. An alternate scenario laid out in the draft plan would raise the target maximum to 395 MT of CO2, to account for the construction of new captive plants to serve growing industrial power needs.
Read More: Just Energy Transition Partnerships and How They Work: QuickTake
Officials have said they are aiming to have a revised—perhaps final—investment plan before COP28 begins in Dubai at the end of November, taking on public feedback. But to do that, they will need to come to agreement on at least three major, interrelated issues: the money, the emissions target and the mechanics of the coal phaseout, including changes to Indonesian laws and policies that hold back wider green progress.
First, the funds. At around $21.5 billion, according to the latest figures, this is the biggest attempt to blend private and public capital to jump start the energy transition in the developing world, more than twice the size of the original deal struck with South Africa in 2021. The capital is supposed to come from two sources: $11.5 billion mostly in grants and concessional loans from the donors (the Group of Seven economies plus Denmark and Norway), the rest from private-sector investments, marshaled by members of the Glasgow Financial Alliance for Net Zero.
But there may not yet be enough in either bucket. There is just $289 million in grants, with half earmarked for technical assistance—funding for experts, consultants and advisors to model and support the energy transition. Almost all of the rest is loans, at interest rates to be determined later.
For Indonesia, which is responsible for a tiny fraction of historical emissions relative to the donor countries, this adds up to a problem. JETPs are supposed to bring costs for emerging countries more in line with what already wealthy nations would pay, via grant financing or ultra-low-rate loans. They are intended as catalysts, facilitating affordable investment. Otherwise, there’s little financial incentive for Southeast Asia’s biggest economy to risk its own development to clean up the rich world’s mess, as Jakarta sees it, especially when interest rates are rising globally.
To make matters more complicated, there are significant restrictions on how the public money can be used. Around $4.2 billion has already been allocated to specific projects, including two early coal-plant retirements currently underway. The remainder is more flexible—but only roughly a quarter is eligible for shutting down coal-fired power plants, a cornerstone policy that has failed to attract meaningful support in practice.
Read more: Closing Coal Plants Proves a Hard Sell for Big Global Banks
On the private side, people close to the bank partners say investors are waiting to see what their options are. So far, there’s been little appetite for funding phase-outs currently in more advanced negotiations, energy-sector and financing sources say, one a privately owned power plant in Cirebon, the other the state-owned facility in Pelabuhan Ratu. Risks are high, and coal exclusion policies remain in place for many large banks and funds. All fear accusations of greenwashing.
“We welcome the progress that has been made on the Indonesia JETP,” GFANZ said in an email. It declined to comment on ongoing negotiations.
Then there is the question of the emissions target agreed last year. People close to those discussions say negotiators sidestepped the impact of Indonesia’s growing fleet of captive coal-fired power plants, single-purpose engines built to support nickel production and other heavy industry in places the grid doesn’t reach. At best, the issue was dramatically underestimated, which may explain why the original deal included a loophole for new captive coal plants.
This is no mere detail. The captive plants underpin a nickel-processing boom that has placed Indonesia among the major suppliers of minerals critical to the global energy transition. Jokowi, as Indonesia’s president is known, hopes to parlay those reserves into domestic battery and electric-vehicle industries—manufacturing growth, in short, and jobs. The current system is geared to make the most of the country’s resources and fast, but it also means clean-energy ambitions at home and abroad are built on the dirtiest of fossil fuels.
According to the draft, current captive capacity is around 13 gigawatts with another 21.5 in the pipeline, and almost half of that is already under construction. That is higher than previous assumptions—Indonesia’s total coal-power fleet is usually pegged at roughly 40 GW, so captive accounts for about a third—and points to a rate of growth at odds with the need to eliminate coal entirely by mid-century to hit global climate commitments.
Worse, the lack of centralized data casts doubt even on the new figures and makes credible estimates for a clean-up impossible. There are questions around the age, size and function of captive coal plants, which are not part of the numbers published by the state utility and where few parties involved have incentives to be transparent.
All of this is before considering the policies in Indonesia that continue to hamper the transition, including a law governing the sale of state assets that complicates any sale at a loss. Without specific exclusions, executives risk jail, and the past experience of state-owned enterprise bosses offers little ground for comfort. The measure was an anti-corruption tool, designed to prevent directors from cutting sweetheart deals for personal gain, but it’s now also slowing down the reshaping of an economy that relies on coal for growth.
To wind down plants owned by the state utility Perusahaan Listrik Negara, known as PLN, all parties have to agree on the market value of the facilities. Those are likely to be lower than what’s currently on the utility’s books—in 2015, it revalued the assets to help cope with heavy debts—so any kind of sale or refinancing tied to early retirement would register as a loss.
“This is the first constraint,” said President Director Edwin Syahruzad of state-owned infrastructure financing company PT Sarana Multi Infrastruktur, or SMI, set to play a key role in the phaseout. “There’s no way we can have a transaction below the estimated book value because it will bring PLN to the risk of state losses.”
Indonesian officials hope to reassure PLN directors, and the draft proposal lobbies for legislative changes to provide official cover. That’s unlikely to happen soon, given the country is heading into an election year. Meanwhile, processes like the early phaseout of the Pelabuhan Ratu power plant, which PLN values between 12 trillion and 14 trillion rupiah ($790 million to $920 million), remain uncertain.
Of course, there are other pending questions. Will Indonesia negotiate with all of its partners as a group or with each individually? Where will the money come from to update and expand the power grid so it can eventually accommodate renewable energy? What about the government subsidies and other measures that keep coal power cheap, and limit investor interest in solar and wind projects?
People close to the process acknowledge that the issues are more complicated than they anticipated in the months leading up to the initial JETP agreement. They bemoan overly ambitions timelines and insufficient technical preparation.
South Africa’s JETP is also struggling with its own structural, financial and ultimately political issues, which is reassuring to some involved in Indonesia’s planning but ominous to others.
“We really need to make sure we’re finding tools that are a little more of a wholesale approach to this,” said Jake Schmidt, a strategic director at the Natural Resources Defense Council, a US-based advocacy group. “These have to succeed. We have to be able to figure out how to help some countries do an early retirement of their coal fleet.”
Despite the delays and hurdles in Indonesia, no one is yet walking away. The draft investment plan, however imperfect, is progress. Jokowi has made this one of the signature initiatives that will define his final term in office. For the US and its partners, including development banks and some of the financial sector’s biggest private institutions, success will give new credibility to their environmental commitments and burnish their influence in the Global South.
“In an ideal world, of course, there would have been a framework in place, the science would be done, there would be method in the madness,” said Aditya Lolla, the Asia Programme Lead for energy think tank Ember. “But top-down climate action is currently moving the debate, and we take what we can get. Of course, there is a lot of frustration, but there is no going back.”
( GFANZ is co-chaired by former Bank of England governor Mark Carney, who has been named chairman of Bloomberg’s board, and by Michael R. Bloomberg, the founder of Bloomberg News parent Bloomberg LP.)
–With assistance from Clara Ferreira Marques, Norman Harsono and Yudith Ho.
STONECREST, Ga. (AP) — Kamala Harris told the congregation of a large Black church in suburban Atlanta on Sunday that people must show compassion and respect in their daily lives and do more than just “preach the values.”
The Democratic presidential nominee’s visit to New Birth Missionary Baptist Church in Stonecrest on her 60th birthday, marked by a song by the congregation, was part of a broad, nationwide campaign, known as “Souls to the Polls,” that encourages Black churchgoers to vote.
Pastor Jamal Bryant said the vice president was “an American hero, the voice of the future” and “our fearless leader.” He also used his sermon to welcome the idea of America electing a woman for the first time as president. “It takes a real man to support a real woman,” Bryant said.
“When Black women roll up their sleeves, then society has got to change,” the pastor said.
Harris told the parable of the Good Samaritan from the Gospel of Luke, about a man who was traveling from Jerusalem to Jericho and was attacked by robbers. The traveler was beaten and left bloodied, but helped by a stranger.
All faiths promote the idea of loving thy neighbor, Harris said, but far harder to achieve is truly loving a stranger as if that person were a neighbor.
“In this moment, across our nation, what we do see are some who try to deepen division among us, spread hate, sow fear and cause chaos,” Harris told the congregation. “The true measure of the strength of a leader is based on who you lift up.”
She was more somber than during her political rallies, stressing that real faith means defending humanity. She said the Samaritan parable reminds people that “it is not enough to preach the values of compassion and respect. We must live them.”
Harris ended by saying, “Weeping may endure for a night, but joy cometh in the morning,” as attendees applauded her.
Many in attendance wore pink to promote breast cancer awareness. Also on hand was Opal Lee, an activist in the movement to make Juneteenth a federally recognized holiday. Harris hugged her.
The vice president also has a midday stop at Divine Faith Ministries International in Jonesboro with singer Stevie Wonder, before taping an interview with the Rev. Al Sharpton that will air later Sunday on MSNBC. The schedule reflects her campaign’s push to treat every voting group like a swing state voter, trying to appeal to them all in a tightly contested election with early voting in progress.
Harris’ running mate, Minnesota Gov. Tim Walz, headed to church in Saginaw, Michigan, and his wife, Gwen, was going to a service in Las Vegas.
The “Souls to the Polls” effort launched last week and is led by the National Advisory Board of Black Faith Leaders, which is sending representatives across battleground states as early voting begins in the Nov. 5 election.
“My father used to say, a ‘voteless people is a powerless people’ and one of the most important steps we can take is that short step to the ballot box,” Martin Luther King III said Friday. “When Black voters are organized and engaged, we have the power to shift the trajectory of this nation.”
On Saturday, the vice president rallied supporters in Detroit with singer Lizzo before traveling to Atlanta to focus on abortion rights, highlighting the death of a Georgia mother amid the state’s restrictive abortion laws that took effect after the U.S. Supreme Court, with three justices nominated by Donald Trump, overturned Roe v. Wade.
“Donald Trump still refuses to take accountability, to take any accountability, for the pain and the suffering he has caused,” Harris said.
Harris is a Baptist whose husband, Doug Emhoff, is Jewish. She has said she’s inspired by the work of the Rev. Martin Luther King Jr., and influenced by the religious traditions of her mother’s native India as well as the Black Church. Harris sang in the choir as a child at Twenty Third Avenue Church of God in Oakland.
“Souls to the Polls” as an idea traces back to the Civil Rights Movement. The Rev. George Lee, a Black entrepreneur from Mississippi, was killed by white supremacists in 1955 after he helped nearly 100 Black residents register to vote in the town of Belzoni. The cemetery where Lee is buried has served as a polling place.
Black church congregations across the country have undertaken get-out-the-vote campaigns for years. In part to counteract voter suppression tactics that date back to the Jim Crow era, early voting in the Black community is stressed from pulpits nearly as much as it is by candidates.
In Georgia, early voting began on Tuesday, and more than 310,000 people voted on that day, more than doubling the first-day total in 2020. A record 5 million people voted in the 2020 presidential election in Georgia.
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This story has been corrected to reflect that the mobilization effort launched last week, not Oct. 20.
VANCOUVER – Predictions of a close election were holding true in British Columbia on Saturday, with early returns showing the New Democrats and the B.C. Conservatives locked in a tight battle.
Both NDP Leader David Eby and Conservative Leader John Rustad retained their seats, while Green Leader Sonia Furstenau lost to the NDP’s Grace Lore after switching ridings to Victoria-Beacon Hill.
However, the Greens retained their place in the legislature after Rob Botterell won in Saanich North and the Islands, previously occupied by party colleague Adam Olsen, who did not seek re-election.
It was a rain-drenched election day in much of the province.
Voters braved high winds and torrential downpours brought by an atmospheric river weather system that forced closures of several polling stations due to power outages.
Residents faced a choice for the next government that would have seemed unthinkable just a few months ago, between the incumbent New Democrats led by Eby and Rustad’s B.C. Conservatives, who received less than two per cent of the vote last election
Among the winners were the NDP’s Housing Minister Ravi Kahlon in Delta North and Attorney General Niki Sharma in Vancouver-Hastings, as well as the Conservatives Bruce Banman in Abbotsford South and Brent Chapman in Surrey South.
Chapman had been heavily criticized during the campaign for an old social media post that called Palestinian children “inbred” and “time bombs.”
Results came in quickly, as promised by Elections BC, with electronic vote tabulation being used provincewide for the first time.
The election authority expected the count would be “substantially complete” by 9 p.m., one hour after the close of polls.
Six new seats have been added since the last provincial election, and to win a majority, a party must secure 47 seats in the 93-seat legislature.
There had already been a big turnout before election day on Saturday, with more than a million advance votes cast, representing more than 28 per cent of valid voters and smashing the previous record for early polling.
The wild weather on election day was appropriate for such a tumultuous campaign.
Once considered a fringe player in provincial politics, the B.C. Conservatives stand on the brink of forming government or becoming the official Opposition.
Rustad’s unlikely rise came after he was thrown out of the Opposition, then known as the BC Liberals, joined the Conservatives as leader, and steered them to a level of popularity that led to the collapse of his old party, now called BC United — all in just two years.
Rustad shared a photo on social media Saturday showing himself smiling and walking with his wife at a voting station, with a message saying, “This is the first time Kim and I have voted for the Conservative Party of BC!”
Eby, who voted earlier in the week, posted a message on social media Saturday telling voters to “grab an umbrella and stay safe.”
Two voting sites in Cariboo-Chilcotin in the B.C. Interior and one in Maple Ridge in the Lower Mainland were closed due to power cuts, Elections BC said, while several sites in Kamloops, Langley and Port Moody, as well as on Hornby, Denman and Mayne islands, were temporarily shut but reopened by mid-afternoon.
Some former BC United MLAs running as Independents were defeated, with Karin Kirkpatrick, Dan Davies, Coralee Oakes and Tom Shypitka all losing to Conservatives.
Kirkpatrick had said in a statement before the results came in that her campaign had been in touch with Elections BC about the risk of weather-related disruptions, and was told that voting tabulation machines have battery power for four hours in the event of an outage.
— With files from Brenna Owen
This report by The Canadian Press was first published Oct. 19, 2024.
Rustad was kicked out of the Opposition BC United Party for his support on social media of an outspoken climate change critic in 2022, and last year was acclaimed as the B.C. Conservative leader.
Buoyed by the BC United party suspending its campaign, and the popularity of Pierre Poilievre’s federal Conservatives, Rustad led his party into contention in the provincial election.
