Indonesia and Japan recently took a new step in their energy cooperation with several strategic projects designed to diversify and secure Indonesian energy infrastructure. This collaboration primarily revolves around the Just Energy Transition Partnership (JETP) and the Asia Zero Emission Community (AZEC) initiative. These partnerships structure significant investments, accompanied by substantial financial commitments from both sides. Targeted projects include hydropower and geothermal plants, as well as extensive electrical infrastructure.
Priority Hydropower and Geothermal Projects
The flagship project of this cooperation is the Kayan hydropower plant, planned to reach a total capacity of 9,000 megawatts (MW). Located in North Kalimantan, this project represents an investment of nearly 18 billion dollars and aims to supply a major industrial park. This industrial park, situated in Tanah Kuning, intends to host numerous national and international companies. This initiative aligns with Indonesia’s objectives of significantly increasing the share of renewable energies in its national energy mix.
In addition, the expansion of the Muara Laboh geothermal plant is another bilateral priority. This project plans to commission a new 66 MW unit, thereby increasing the plant’s total capacity to approximately 170 MW. Enhancing geothermal capacities aims to meet growing electricity demand in the Sumatra region. Investment in this plant directly supports the objectives set by the JETP initiative, aiming to ensure long-term reliable energy resources.
Strengthening Energy Infrastructure
Under the AZEC initiative, Japan has signed several bilateral agreements to finance specific projects in Indonesia. These projects mainly involve the development of new energy sources, such as biofuels and green hydrogen. The total amount committed to these projects is around one billion dollars. This initiative seeks to consolidate the integration of alternative energies into Indonesia’s national grid while supporting significant energy diversification.
The cooperation also includes investments in electricity distribution infrastructure, notably through the Java-Sumatra grid expansion project. This grid is crucial for national energy stability and allows for the integration of new renewable production capacities envisaged in joint projects with Japan. This major project will help strengthen the energy reliability needed for the country’s economic and industrial development.
Future Commitments and Partnership Continuity
Despite the recent withdrawal of the United States from the JETP partnership, Japan, alongside other international partners such as Germany, has confirmed its intention to maintain financial and technical commitments with Indonesia. This commitment ensures the continuation of ongoing projects and highlights the stability of bilateral cooperation. These commitments represent significant support for Indonesia’s energy strategy, particularly as the country’s energy demand continues to rise rapidly.
This bilateral cooperation thus reflects a structured approach by both countries to address shared energy needs. The initiatives undertaken demonstrate their determination to invest substantially in energy infrastructure, thereby laying solid foundations for lasting economic and strategic cooperation between Indonesia and Japan.
