Indonesia's $100 Billion JETP Investment Plan Needs Clearer Priorities and Transparency

Indonesia has released its Comprehensive Investment and Policy Plan under the US$20 billion Just Energy Transition Partnership, identifying hundreds of billions of dollars in prospective investments but raising concerns about foundational assumptions, an overreliance on long-gestation renewable technologies and insufficient prioritisation among more than 400 near-term projects. IEEFA calls for greater transparency, rigorous demand modelling and phased implementation to protect against repeating the overinvestment mistakes of the coal era.

The CIPP identifies over 400 near-term investments totalling US$67 billion, covering transmission and distribution, hydroelectricity, geothermal, solar and wind. The most fundamental driver of the plan's investment scale is a 5.8% energy demand growth assumption. IEEFA argues this is difficult to justify given that GDP growth has decoupled from energy consumption globally due to improved energy productivity and end-use efficiency — implying the assumed growth rate presupposes an improbably high rate of economic expansion. The Java-Bali grid added 20 GW of mostly coal-fired capacity in the past decade, much of it unnecessary, with standby reserve capacity now sitting near 55%.

The CIPP allocates US$22 billion to hydroelectricity and a nearly equivalent amount to geothermal, despite both technologies being notoriously challenging to implement due to long construction timelines and cost escalations. Solar — despite having globally-proven ultra-low lifecycle costs and domestic green manufacturing ambitions — has the fewest identified projects. Wind energy projects total nearly 2.5 times the planned solar capacity despite potentially challenging resource speeds. IEEFA warns that over-optimistic projections and poorly sequenced priorities could produce stranded assets and fiscal constraint at state utility PLN, replicating the coal-era dynamic.

IEEFA recommends aggressive prioritisation — focusing on transmission improvements, renewable energy pricing policies, geothermal drilling campaigns and near-term renewable additions that demonstrate fossil plant retirement is viable. While 80% of CIPP projects target implementation between 2024 and 2026, 40% are not yet in Indonesia's long-term Electricity Supply Business Plan and will require additional approvals. IEEFA also calls for comprehensive data disclosure on existing coal plant operating efficiencies, dispatch rates and marginal costs to inform retirement decisions. Currently, only two coal plant early retirement prospects totalling 1.6 MW have been identified under JETP.

Key figure — US$67 billion — estimated value of over 400 near-term investments identified in Indonesia's JETP Comprehensive Investment and Policy Plan