ADB approves $500 mln loan for Indonesia's energy transition efforts 

The Asian Development Bank (ADB) said on Friday it has approved a $500 million policy-based loan to Indonesia to fund a program designed to help its energy transition efforts. 

Resource-rich Indonesia, which is aiming for net-zero carbon emissions by 2060, has been trying to reduce the use of coal with financial support from the G7's Just Energy Transition Partnership (JETP). 

Highlighting Indonesia's reliance on coal, the ADB said in a statement the program "focuses on establishing a robust policy and regulatory framework for clean energy transition, strengthening sector governance and financial sustainability". 

"Indonesia is at a critical juncture in its energy transition journey," said Jiro Tominaga, ADB's country director for Indonesia, adding the loan supported Jakarta's efforts "to accelerate its shift towards sustainable and clean energy". 

The ADB did not immediately respond to a request for comment when asked about specifics on how the funds would be spent. 

The program includes developing a JETP-supported investment and policy plan, and improvements for scaling up renewable energy capacity, said ADB, whose co-financing partners for the program include France's development agency, Agence Française de Développement (AFD), and German state lender KfW. 

Funds worth $20 billion have been pledged under a JETP plan for Indonesia to cap emissions in the power sector at 290 metric tons of carbon in 2030, but disbursement of funds has been slow. 

Asked about JETP's slow implementation, Britain's development minister Anneliese Dodds told Reuters this week that JETP is a long-term partnership that requires big changes around infrastructure. 

"This is not going to happen overnight," she said. "The UK is really working to renew that approach so that together we can be focused on green growth and economic development." 

Dodds added Indonesia has an opportunity to be a carbon sink for the region and that Britain intends to work with other JETP partners to accelerate efforts such as poverty alleviation and deforestation. 

Source: Reuters 

Indonesia, UK ink critical minerals partnership  

The government has signed a new deal with the UK to facilitate the transfer of technology and skills in the critical minerals sector that also seeks to address related environmental and social risks. 

Indonesia and the United Kingdom have signed a memorandum of understanding (MoU) to establish a strategic partnership in critical minerals for facilitating technology and skills transfers, while also addressing environmental and social risks.  

Energy and Mineral Resources Minister Bahlil Lahadalia and UK Development Minister Anneliese Dodds, representing the Foreign, Commonwealth and Development Office, signed the deal during a ceremony on Wednesday in Jakarta.  

The MoU outlines key areas of collaboration, including geology, mining, manufacturing, recycling and post-mining environmental rehabilitation.  

“The core of the agreement is technology transfer, which both countries have committed to,” Bahlil said during the signing ceremony. “[Minister Dodds] and I have signed it, and we will ensure proper follow-up.”  

Bahlil added that beyond critical minerals, the two countries had significant potential for collaborating on renewable energy projects, such as wind and solar.  

He added that the government aimed to reduce the investment costs in critical minerals and renewable energy to make electricity more accessible to consumers.  

“They [the UK] have the technology, while we have significant potential [of renewable resrouces]. We just need to combine them,” Bahlil said. 

During Wednesday’s ceremony, Dodds said the MoU would not only bolster investment and job creation but also improve local welfare. She also expressed confidence that the agreement would serve as a foundation for future long-term projects and investments between the UK and Indonesia. 

Since 2020, the government and the British Embassy in Jakarta have been partners in the Mentari program, which aims to enhance the implementation of policies, regulations and guidelines to create a more conducive business environment in the renewable energy sector.  

The program provides policy recommendations and involves capacity building for key stakeholders. It also seeks to bridge the viability gap between available funding and potential renewable energy projects.  

Last year, the British Embassy increased the grant for the Mentari program to 20 million pounds (US$26.4 million) and extended its term by two years. 

During his visit to Indonesia in June last year, then-British deputy prime minister Oliver Dowden conveyed his expectations for increased UK investment in the critical minerals sector, noting Indonesia’s role as a major producer of those commodities, particularly nickel.  

“Indonesia is a very important trading partner and there is more we can do to expand that trade, especially in new areas where we can have more investment,” Dowden said at the time.  

Besides the UK, Indonesia has an MoU on critical minerals with Australia, signed in November 2023 with Industry and Science Minister Ed Husky. This agreement focuses on processing critical minerals for the electric vehicle industry, including battery manufacturing.  

Critical minerals were also a major focus at the Indonesia-Africa Forum 2024 held earlier this month. 

Source: The Jakarta Post 

Virgin Australia Becomes 1st Foreign Airline to Use Pertamina’s Sustainable Fuel 

Virgin Australia Airlines has become the first international airline to use sustainable aviation fuel (SAF) produced by Indonesia’s state-run oil company Pertamina. 

The SAF is made of 38.43 percent of synthetic kerosene and 61.78 percent of regular fossil fuel. The synthetic kerosene is produced with used cooking oil. 

The historic refueling using SAF was conducted during an event at Ngurah Rai Airport in Bali on Wednesday. 

"The refueling moment marks Indonesia’s adaptation to the mixed energy demand in the international aviation industry as the SAF becomes the mid-term solution to reduce the carbon print without drastic changes in the aircraft design, airport infrastructure, and jet fuel supply chain," said Maya Kusmaya, marketing director of the company’s sales arm Pertamina Patra Niaga. 

She said Pertamina Patra Niaga will continue to expand the SAF global distribution after the fuel product received recognition from the International Sustainability and Carbon Certification and the Renewable Energy Directive-European Union (RED-EU).  

She claimed that SAF has also met standards from the American Society of Testing and Materials. 

During the event, Pertamina supplied around 160 kiloliters of SAF to a Virgin Australia Boeing 737 plane for two days of flights between Bali and Australia. 

Virgin Australia's website mentions that it has been actively supporting the development of sustainable aviation fuels since 2008.  

In 2018, Virgin Australia Group, in collaboration with the Queensland Government, Brisbane Airport Corporation and Gevo Inc, became the first airline in Australia to trial the injection of sustainable aviation fuel into an airport fuel supply system. 

Source: The Jakarta Globe