Are Indonesia and Vietnam’s multibillion-dollar clean energy deals stuck? Experts say not yet

JAKARTA, Indonesia (AP) — Indonesia and Vietnam signed multibillion-dollar energy transition deals in 2022 that were heralded as drastic shifts in financing that would enable the coal-dependent countries to pivot to cleaner energy.

The deals, known as Just Energy Transition Partnerships, were funded by developed nations to help the two countries phase out and retire their heavily polluting coal-fired power plants and replace them with clean energy alternatives such as solar or geothermal.

But nearly two years later, critics say little progress has been made under the deals. Supporters say that’s not a fair assessment, arguing that stakeholders are now collectively making policies for the first time, which could attract more funding, and that the projects simply need more time.

Here’s a look at Indonesia and Vietnam’s JETP deals, issues they face and progress that’s been made.

What do Indonesia and Vietnam’s deals entail?

Indonesia’s deal provides over $20 billion for the early phase-out and retirement of coal-fired power plants and the development of clean energy sources like solar or geothermal. It also moves to bolster the country’s renewable energy supply chains over the next three to five years.

Nearly all of Indonesia’s energy needs are currently met by fossil fuels, with 60% coming from highly polluting coal. In 2021, Indonesia’s energy sector emissions included around 600 million tons of carbon dioxide, the world’s ninth highest, according to the International Energy Agency. Population and economic growth are expected to triple energy consumption by 2050.

Vietnam signed its $15.5 billion deal in December 2022, aiming to get nearly half of the country’s electricity from clean sources by 2030. A substantial part of that