Need 500 Billion US Dollars For Decarbonization, PLN Gets 'Ammunition Injection' From ADB

Illustration (Photo: Doc. Antara)

JAKARTA - PT Perusahaan Listrik Negara (PLN) is said to have reached an agreement with the Asian Development Bank (ADB) regarding the reduction of carbon emissions (decarbonization) produced by coal-fired power plants in order to support the government's target of achieving Carbon Neutral 2060.

PLN President Director Zulkifli Zaini said the company must invest more than US$500 billion over the next 40 years, thus requiring access to green financing, development grants, and support for the government-to-government (G2G) scheme.

"In the long term, we are targeting net zero emissions by 2060 or sooner," he said in a press statement after signing a memorandum of understanding with ADB in Glasgow, as quoted by the editorial team on Thursday, November 4.

According to Zulkifli, the scope of the collaboration that was built includes financial support, feasibility studies, including evaluation and looking for programs or other mechanisms that are in accordance with green economy principles.

Furthermore, the PLN boss emphasized that the target would be achieved if the electricity and transportation sectors carried out decarbonization. For this reason, PLN also has an important role in driving the growth of environmentally friendly energy.

"Our mission is to provide affordable, safe and clean electricity. We are committed to decarbonization," he said.

On the same occasion, ADB Vice President Ahmed Saeed said that cooperation with PLN is a good opportunity to achieve the energy transition to clean energy. He said that ADB had been working with Indonesia for more than 50 years.

"This opportunity is very good for us and PLN in supporting Indonesia towards the energy transition from high-carbon energy to clean energy," he said.

Saeed added that Indonesia is one of three countries that are ADB partners in the Energy Transition Mechanism (ETM) pilot project.

Meanwhile, this program is an ADB-supported carbon reduction program that aims to use public-private financing to accelerate the retirement of coal-fired power plants and replace them with clean and renewable energy sources.

"ADB recently completed an ETM pre-feasibility study and is now working on a full feasibility study," said Saeed.

Meanwhile, Deputy Minister I of BUMN Pahala Mansury who witnessed the signing said that PLN as one of the state entities has an important role in supporting the government's agenda in the decarbonization program.

"Cooperation with ADB is additional ammunition for PLN to accelerate the targets set," he added.

For information, Indonesia's carbon emissions will increase above 4 billion tons per year in 2060 if the relevant stakeholders only carry out the business as usual (BAU) scenario or do nothing. Most of the exhaust gas is produced by the transportation and electricity sectors.