Indonesia’s energy transition in doubt as US pulls out of US$20 billion coal phase-out plan

Despite Jakarta’s ambitious net-zero goals, analysts say the country has limited political will to fulfil its climate commitments on its own

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A fisherman looking at the Suralaya coal-fired power plant in Cilegon in Indonesia’s Banten province. Photo: AFP

Published: 12:00pm, 14 Mar 2025

The United States’ withdrawal from a multibillion-dollar plan designed to support Indonesia’s shift away from coal is likely to undermine the country’s energy-transition goals, analysts have said, particularly given Jakarta’s weak political will to meet its climate commitments.

Washington confirmed its exit from the programme, known as the Just Energy Transition Partnership (JETP), on March 6. The plan was first unveiled at the 2021 United Nations Climate Change Conference (COP26) in Scotland, with the goal of assisting developing countries transition to cleaner energy sources.

Indonesia, Vietnam, South Africa and Senegal were announced as the first beneficiaries, receiving loans, financial guarantees and grants to support their coal phase-out. Funds for the partnership were secured from public and private lenders in the US and other advanced nations, including Japan, G7 members, Norway, Denmark and the European Union.

About US$20 billion was committed to help Indonesia – one of Asia’s largest polluters – shift away from fossil fuels. Meanwhile, Vietnam received a US$15.5-billion package.

A screen grab from video shows a critically endangered orangutan walking in a coal mine in East Kutai, East Kalimantan, on January 27. Photo: AFP

However, with Washington shifting its climate priorities under President Donald Trump, backers of the JETP are likely evaluating the potential impact on future climate financing, analysts have said.