ClimateWorks Foundation
ClimateWorks Foundation
Scoping of Indonesian Independent Power Producers for Energy Transition Transactions via Sustainable Financing
Partners: Institute for Essential Services Reform (IESR)
Background of the Project/ Challenge
A multi-phased project designed to assess the feasibility of private sector-led coal retirement and support the actual execution of coal retirement transactions or initiatives by Independent Power Producers (IPPs) as part of broader G20 commitments under Indonesia’s energy transition journey.
What We Did
In the first phase, the engagement shall consist of a scoping study to identify opportunities for a private sector-led coal exit. The second phase shall organize facilitated dialogues with IPPs to develop coal transition strategies while the third and fourth phase shall support the development of financial models and appropriate structures that will then be packaged as commitments to be presented to the Indonesian government.
CSV and IESR completed the following workstreams:
- Grid and Plant level analysis and commercial viability analysis: CSV combined desk research with the IESR-UMD Indonesia Coal phaseout report to develop a preliminary plant and commercial analysis of coal retirement for IPPs.This was used at the informal talks with PLN and IPPs by IESR / CSV.
- Market sounding for IPP-led coal retirement: Over the course of 4 months, IESR led market sounding by engaging in back-end diplomacy efforts and front-end dialogue initiatives to strategically engage and meaningfully push select IPP stakeholders towards considering coal retirement. CSV engaged by presenting and discussing Indonesia’s IPP coal retirement landscape and the AC Energy ETM at IPP and PLN meetings / events.
- Announcements and communications:
- Front-end efforts: Leveraged on the growing momentum around energy transition and the upcoming G20 summit in Bali. This set the stage to create a compelling platform to invite bold commitments from IPPs.
- Back-end diplomacy efforts: Leveraged existing relationships and ties with the IPPs and government officials to gain an advisory relationship on the topic energy transitions.
Outcome
- Seeding IPP led coal retirement to largest IPPs, government stakeholders
- Adding to chorus for PLN and SMI to include RE as part of ETM discussions to facilitate genuine transition + value recovery
- Driving international attention and scrutiny for Indonesia ETM to keep momentum towards effective transition
- Phase 2 is currently being undertaken next, focusing on establishing a clear pathway for the private sector to participate in Indonesia’s energy transition initiatives through multiple modalities – further engaging IPPs to prototype deals, aligning with government stakeholders, and tapping international financial institutions and associations
Testimonials
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Position or Career
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