A Path to Justice: The Ford Foundation’s Commitment to an Energy Transition in Indonesia
Khairul AbdiAmid the steam and steel of Indonesia’s coal fuel power plants (CFPP), you’ll find something else: change. The country has committed to retiring 15% of its CFPPs by the year 2030. It’s a remarkable shift for a country that produces over 60% of its power with coal.
And that’s just the beginning.
The shift away from coal is just one story playing out against the backdrop of a broader emerging energy change in Indonesia—and it is powered by the Indonesian Just Energy Transition Partnership (JETP) program.
As the world’s fourth most populous country and a rapidly developing economy, Indonesia faces significant opportunities and hurdles in shifting from fossil-based to renewable energy sources. A just energy transition in Indonesia involves not only increasing the share of renewables in the national energy mix but also ensuring the transition to this new mix is fair, equitable, and inclusive. This requires a multifaceted approach that addresses economic, social, and environmental aspects to ensure that the benefits of clean energy are accessible to all Indonesians while ensuring that the costs of the transition are equitably distributed.
In November 2022, the president of Indonesia and the International Partners Group (IPG), led by the United States and Japan, reached an investment agreement to support Indonesia in its shift towards sustainable energy sources. Known as a Just Energy Transition Partnership, or JETP, this agreement is only the second of its kind after South Africa. (Vietnam and Senegal have now also become JETP recipient countries as well.) It mobilized a $20 billion funding package to help reach climate goals in the region with financial support and technical assistance from countries in the Global North. The partnership seeks to cap emissions, boost renewable energy to at least 34% of Indonesia’s total power generation by 2030, and chart a course toward net-zero emissions by 2050.
However, this partnership is about more than financing: It is about facilitating a holistic transition that respects the balance between environmental sustainability and socioeconomic equity. In other words, it’s about justice in all its forms.
The concept of a “just transition” is built on three fundamental principles: distributive justice, which ensures the economic benefits of energy transitions are shared broadly; procedural justice, which emphasizes the importance of accountability and the inclusion all stakeholders in decision-making processes; and restorative justice, which seeks to address the historical and ongoing harms caused by environmental degradation.
Today, more people are realizing that any discussion around a just energy transition can’t only be about the environment. Equally important is centering economic justice, development, the future of sustainable financial models, and new kinds of inclusive economies.
Indonesia is home to 160 coal mines and 234 coal-fired power plants. As Indonesia retires its aging coal-fueled power plants, anyone who currently works in the industry will ultimately be out of a job. The businesses that sustained the sector—from coal transportation workers to equipment maintenance teams—will also become obsolete, and these closures will affect both individuals and communities in coal-dependent regions.
A truly just energy transition must foster new job opportunities in emerging sectors, secure energy affordability, and enhance community resilience. Indeed, those who are most impacted by economic changes and climate threats must have an opportunity to actively participate in the transition process.
Ambitious targets also bring challenges: High initial costs, technological limitations, and the need for substantial infrastructural overhaul pose significant barriers. And the geographic diversity of the archipelago—which includes 17,508 islands with over 700 languages—complicates the widespread deployment of uniform technological solutions.
Thankfully, the development of just energy transition policies has invited a broad range of stakeholders to the table, from government bodies and policymakers to investors, civil society organizations, and affected communities. This inclusive approach is essential for crafting policies that are effective and equitable, ensuring that they serve the broad public interest without imposing undue burdens on the most vulnerable populations.
Just three months after the JETP declaration, Indonesia and the IPG launched the JETP Secretariat as the coordinator for internal and external stakeholders. Indonesia has also established a governance structure for implementing JETP. Last year, the country released its Comprehensive Investment and Policy Plan document, which will guide the JETP implementation.
The Ford Foundation’s Indonesia regional office has provided active support to the just energy transition work, including the partnership efforts. Our work has focused on engaging and strengthening civil society and ensuring that strong justice frameworks and gender inclusivity are central to this work. For example, we’ve proposed just transition working groups to support the JETP Secretariat and provided a grant that has directly engaged those working groups. For instance, with Ford’s support, the JETP Secretariat worked with the Indonesia Center for Environmental Law to conduct public consultations for civil society groups to help shape the country’s plan for implementing JETP.
The Institute for Essential Services Reform also facilitated a forum in South Sumatra, the largest coal producer in Indonesia, where policymakers from the region came together to discuss ways to increase the province’s use of clean energy. Local models piloted in the Lahat-South Sumatra province can inform work in other coal-producing districts and help advance the national energy transition strategy.
Rumah Energi Foundation, another partner, has showcased the potential of community-led renewable energy projects in Eastern Indonesia. Working alongside a women’s cooperative, Rumah Energi has empowered local farming communities to harness solar energy for agricultural processing. This initiative decreases dependence on grid electricity and promotes economic independence, presenting a scalable model for sustainable development across similar regions globally. A recent analysis by Climate Policy Initiative Indonesia focused on how four other successful community-based renewable energy projects in Eastern Indonesia reinforce the importance of community ownership by ensuring local governments, village-owned enterprises, and households are managing renewable energy grids collectively to advance a just and inclusive transition.
Ford also supports JETPs globally by providing funding, expertise, and a platform for convening stakeholders. In 2023, Ford hosted a convening among Indonesia, South Africa, and Vietnam—countries that, despite their different contexts and energy profiles, face common challenges in their energy transitions. The event, held in Jakarta, conducted a field visit to the Pelabuhan Ratu Coal-Fired Power Plant—one of the CFPPs under the decommissioning plan—and facilitated critical dialogues about best practices, as well as shared learnings in overcoming the socioeconomic and technological hurdles associated with decommissioning coal power. The results were recently shared in the Navigating the Just Energy Transition Together report.
JETPs are far from perfect solutions, but they mark substantial progress toward addressing the global and historical injustices embedded in all global and national energy systems. The Global North has emitted an estimated 92% of the world’s total emissions while demanding the Global South make these transitions with no meaningful financial support—until now. However, this new still support falls dramatically short of what is necessary or just. In the case of Indonesia, grants account for just a small portion of the $20 billion, with only one-third of the money coming at concessional rates.
Still, the JETP model illustrates how greater involvement from civil society organizations, enhanced coalition-building, and increased collaboration between the private sector and governments can each play a part in the climate discussion. Most importantly, it positions governments in the Global South to assume leadership roles in international forums to secure the financing needed to expedite their moves away from fossil fuels despite existing inefficiencies. However, it’s worth noting that securing fair and adequate financing remains difficult due to the slow pace and limited scope of pledged funding, which falls short of covering the entire cost of the just energy transition.
As we move forward, the lessons from Indonesia’s just energy transition are clear: Inclusivity is not optional but essential. The journey toward sustainability must be paved with equity, cooperation, and justice—and the willingness of developed countries to provide more funding at concessionary rates. This story doesn’t just hold promise for Indonesia; it could offer valuable signposts for the world, illustrating how deeply intertwined environmental sustainability is with social and financial equity at the national and global levels.
Ultimately, through the JETP, we are reimagining an energy framework and redefining what it means to achieve progress together, ensuring that no one is left behind in our collective journey toward a cleaner, more equitable future.