Global JETP plans to help developing nations clean up power sectors
JAKARTA, Sept 25 (Reuters) -The early retirement of an Indonesian coal power plant has hit a snag amid wider challenges to the Just Energy Transition Partnership (JETP) programme, a G7-backed funding initiative to help developing nations cut carbon emissions.
Below are details on JETP plans and their progress:
SOUTH AFRICA
South Africa was the first developing nation to reach a deal on a JETP in 2021, an $8.5 billion plan to help the country deliver more ambitious emissions reductions by 2030.
South Africa's JETP aims to help the country cap emissions at between 350 million and 375 million metric tons a year of carbon dioxide equivalent (CO2e) by 2030, the lower end of its self-determined emissions target range, set as part of the Paris agreement at between 350 million and 420 million tons of CO2e.
The bulk of the pledged funding is expected to be invested in clean electricity, with the rest slotted for low-emissions transportation and green hydrogen.
The 2030 targets, however, will likely not be met as the country prioritises addressing its power blackout problems, a South Africa minister said in July.
In December 2023, the UK government said in a report that a persistent power supply crisis has led South Africa to reassess the schedule for decommissioning coal-fired power plants.
INDONESIA
Indonesia's $20 billion JETP financing pledge was announced in late 2022 and is so far the largest.
Around half of the money pledged is expected to come from public financing by G7 donors as well as Norway and Denmark, with the rest to come from private financing that may include commercial loans at market rates.
Southeast Asia's biggest economy aims to cut its annual carbon emissions to 250 million tons of CO2e from its on-grid power sector by 2030, compared with more than 300 million tons without JETP, and increase the share of renewable energy in its power mix to 44% by 2030, from around 12% in 2022, according to a document laying out plans for JETP funds.
Disbursement of the funds, though, has been minimal since Indonesia released the JETP investment document last year. As of end-June, there were just $144.6 million in ongoing projects funded by grants and technical assistance, according to the JETP Secretariat in Indonesia.
This did not include a commitment of up to $126 million in funding from the U.S. government for geothermal power firm PT Medco Cahaya Geothermal in May.
VIETNAM
Vietnam was third to secure a JETP financing pledge, getting a promise for $15.5 billion in late 2022. The funding would be to help it reach peak greenhouse gas emissions from its power sector by 2030, earlier than a projected 2035. The target is to cap the power sector's annual CO2 emissions at 170 million tons by 2030 and 101 million tons by 2050.
Vietnam's JETP plan would also limit its installed capacity of coal-fired power plants at 30.13 GW by 2030, compared with 25.3 GW at the end of 2022.
Hanoi launched its JETP investment plan at COP28 in Dubai last year. In July, its Ministry of Natural Resources and Environment said it had identified 220 investment projects and 60 working groups to mobilise the funds.
SENEGAL
Senegal was fourth to get a JETP financing pledge, with European Union countries leading an effort to secure 2.5 billion euros ($2.8 billion) for the country in June last year.
Under the deal, Senegal is to increase the renewables share in its energy mix to 40% by 2030, up from 29% in 2022.
Senegal and its country donors are due to release a detailed investment plan this year.
($1 = 0.8957 euros)
Reporting by Fransiska Nangoy and Gayatri Suroyo in Jakarta, Tim Cocks in Pretoria and Khanh Vu in Hanoi; Editing by Tom Hogue
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
