Out-Law News | 17 Aug 2021 | 1:08 am | 1 min. read
The Indonesian government has said that $365 billion of international investment will be needed if it is to achieve the emissions reductions it has committed to.
Indonesia has said that it will reduce greenhouse gas emissions by 29% by 2030. According to Indonesia’s finance minister Sri Mulyani Indrawati the country would need $365bn investment to reach.
The government has said that it could reduce emissions by 41% by 2030 if it could raise $479bn in international investment. The government has said that it could contribute 20% of these sums.
Indrawati said the government need to consider how to “design policies and frameworks” to reach the goal by using public-private sector partnerships and international partnerships to cover the financing gap.
The Indonesian government is considering a plan to introduce a carbon tax and prepare a carbon market. A plastic duty is also in consideration which could bring in Rp1.6 trillion ($111 million) in revenue.
James Harris of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: “This represents another positive step in the evolution of the Indonesian markets and economy. There have been a number of recent moves to ramp up the domestic renewable energy sector. Initiatives such as mentioned by the finance minister will be hugely welcome by renewable energy market participants.”
In July the Indonesian government submitted its updated nationally determined climate goals to the United Nations. The country plans to reach net-zero emission by 2060 or earlier.
Meantime, the country’s state-owned electricity distributor Perusahaan Listrik Negara (PLN) has prepared plans for large scale green energy power plants and will increase investment in them to prepare for its prediction that Indonesia’s electricity demand will increase five fold by 2060.