The Government of Indonesia, through the Ministry of Finance, and the Government of Germany through the German Development Bank KfW signed on Monday 30 June an agreement of a EUR 200 million policy-based loan to support Indonesia’s “Affordable and Sustainable Energy Transition Program” (ASET).

Thomas Graf, Chargé d’Affaires ad interim at the German Embassy to Indonesia: “The signing of this agreement marks another concrete step in Germany’s steadfast commitment to the Just Energy Transition Partnership with Indonesia. It clearly shows: Germany stands by its word and delivers by providing financing for Indonesia’s energy transition.”

Indonesia has embarked on a challenging journey to shift away from a dependence on fossil fuels toward cleaner, more sustainable energy sources. This transformation is essential to guarantee energy security and deliver on climate goals. To catalyze investments into renewable energies, regulatory adjustments are necessary – and this is where the Affordable and Sustainable Energy Transition Program (ASET) comes in to support these reforms. It focuses on two pillars: (1) strengthening the policy and regulatory environment for a clean energy transition, and (2) enhancing sector governance and financial sustainability.

Notable achievements supported by the program to date include among others the formation of an energy transition task force and key regulatory advancements aimed at scaling up renewable energy, like the Ministerial Regulations to support rooftop solar PV integration, the establishment of the basis for carbon trading with emissions, as well as the assignment of emission ceilings to power plants.

The signed agreement is part of a broader financing envelope co-financed by the Asian Development Bank (ADB) and Agence Française de Développement (AFD).

The Just Energy Transition Partnership (JETP) is a landmark agreement forged during the G20 Leaders' Summit in Bali in November 2022 between Indonesia and the International Partners Group (IPG), co-led by Germany and Japan. JETP aims to mobilize USD 20 billion in support of Indonesia’s clean energy transition.