Official: US withdrawal from Indonesian coal phase-down program will have limited impact

Indonesia's top official in the initiative, who is also the United States' representative to the international collaboration to assist developing countries transition away from coal, said that the withdrawal will only have a minimal impact.

As part of the President Donald Trump’s plan to reduce foreign aid, the U.S. resigned from the Just Energy Transformation Partnership (JETP), a group of 10 donors.

A U.S. official described the partnership as "the single largest climate finance transaction", but little money was actually disbursed.

Paul Butarbutar (Acting Head of the JETP Secretariat Indonesia) told the Financial Times Energy Transition Summit Asia Conference that the direct impact of U.S. withdrawing from the JETP was not as severe as people thought.

Southeast Asia's nation of over 275 million people has cited its low emissions per capita compared to richer nations and its lack of cheap financing as reasons to rely on its coal reserves. These reserves have allowed it to provide electricity at the lowest price in the region.

Butarbutar stated that the U.S. had pledged $60 million in grants for Indonesia, which they will not receive.

The World Bank was able to borrow money from Indonesian companies for the energy transition. This has already been finalised.

"We can still use the guarantee." Now it's up to us if we want to make use of it or not," said he.

Butarbutar stated that the rest of the U.S. contribution can be channeled via bilateral cooperation between two countries. However, this funding will not be a part JETP.

He said that, in addition to the guarantee, U.S. companies could provide financing for certain projects. As an example, the U.S. Development Finance Corp funded a geothermal energy project with a U.S.-based company. (Reporting and writing by Fransiska Naangoy, Editing and proofreading by Saad Saeed)

(source: Reuters)