JAKARTA - President Prabowo's commitment at the G20 Brazilian Summit to switch from coal plants in the next 15 years needs to be realized immediately. The estimated need for coal-fired power plants until 2050 is estimated at IDR 44 trillion.
Executive Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira Adhinegara said the biggest challenge in the retirement of coal power plants was the limited budget of the government.
"The obligation to pay interest and debt due next year is estimated to reach 45 percent of the total APBN, so that maneuvers for energy transition programs are increasingly limited," he said in his statement, Thursday, December 5.
On the other hand, developed countries in COP29 in Baku, Azerbaijan agreed on the NCQG (New Collective Quantified Goals) scheme where developed countries are obliged to help finance 300 billion US dollars equivalent to IDR 4,800 trillion per year.
Bhima said that this funding assistance is expected to be in the form of a scheme outside of a new loan, one of which is a debt swap or debt exchange.
Bhima said that the debt swap scenario was a way for developed countries to pay their climate debts to developing countries such as Indonesia.
Indonesia has IDR 94.8 trillion in debt in the form of loans (loan) which will mature in 2025, and this debt to developed countries and multilateral institutions. So, the Minister of Finance and the Minister of Energy and Mineral Resources can open a debt negotiation space to be exchanged into coal PLTU pension funds. Developed countries also benefit because they consistently run the NCQG scheme to pay their climate debt." said Bhima.
Meanwhile, Economic Researcher Celios Bakhrul Fikri stated that the formation of a special team to open swap debt negotiations with developed G7 countries in both the Just Energy Transition Partnership (JETP) scheme and bilateral schemes must begin immediately.
President Prabowo's ambitious energy transition commitment can meet with a scheme to exchange the debt of developed countries. The follow-up is that the relevant ministries and PLN must immediately issue a roadmap and a shortlist of Coal PLTU units that will be retired. CelIOS studies have sorted at least 19 PLTUs belonging to PLN that can be included in debt exchange schemes, such as PLTU Suralaya, Paiton and Ombilin. " he said.
BACA JUGA:
According to Bhima, in the implementation of the debt swap for the retirement of coal power plants, there are indeed several challenges that need to be mitigated. One of the challenges is to ensure that the value of the debt that can be exchanged is quite significant. The previous debt swap experience was that the debt value could be exchanged was quite small.
Bhima said that the selection of institutions that will monitor and verify the project is also expected to be independent, not related to creditors.
"In addition, the aspect of transparency to the affected communities from the coal power plant and its compensation must be included in the debt swap package," concluded Bhima.
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