Energy Transition Mechanism Partnership Trust Fund (ETMPTF)
The Energy Transition Mechanism (ETM) is a regional, transformative program that seeks to use concessional and market-based funds to retire existing coal-fired power plants on an accelerated schedule and replace them with clean power. ETM is one component of a larger set of initiatives both domestic and multilateral, including the Indonesia ETM Country Platform and Just Energy Transition Partnership (JETP), respectively, that aims to help Asia and the Pacific mitigate the worst impacts of climate change, such as extreme sea level rise and destructive weather events.
- Countries
- Indonesia
- IKI funding
- 30,000,000.00 €
- Duration
- 12/2022 till 12/2047
- Status
- open
- Implementing organisation
- Asian Development Bank
- Political Partner
-
- Ministry of Energy and Mineral Resources (MEMR) - Indonesia
- Ministry of Environment and Forestry (KLHK) - Indonesia
- Ministry of Finance - Indonesia
- Ministry of State Owned Enterprises (MSOE)
State of implementation/results
- The grant commitment from the International Climate Initiative (IKI) to the ETMPTF is part of Germany contribution to the Just Energy Transition Partnership (JETP).
- Cirebon Energy Transition Mechanism Pilot Project:
- 3.12.2023: A nonbinding framework agreement was signed at COP28 by ADB, Indonesian state-owned power utility company PT PLN, independent power producer PT Cirebon Electric Power (CEP), and the Indonesia Investment Authority (INA) stated that they have conditionally agreed to shorten the power purchase agreement for Cirebon-1 and end the plant’s obligation to provide electricity in December 2035 instead of the original July 2042. Negotiation on the transaction are still ongoing. The 660-megawatt coal-fired power plant (CFPP) Cirebon-1 in Indonesia will likely be retired almost 7 years earlier than scheduled as a result of discussions with the plant’s owners and the Government of Indonesia under the Energy Transition Mechanism (ETM) program of the Asian Development Bank (ADB).
- The financing: Should a deal be agreed to, the financing is expected to be a blended structure, including both concessional capital and capital from ADB's Private Sector Operations Department. The concessional funds will likely include donor-supported funds from ADB’s ETM Partnership Trust Fund as well as a portion of the recently approved Indonesia allocation from the Climate Investment Fund’s Accelerating Coal Transition window. The transaction structure is not yet finalized and a number of financial entities and philanthropies have expressed interest in participating in the transaction.
- The framework agreement is subject to the conclusion of due diligence including environmental, social, and just transition reviews. The framework agreement is also subject to the results of an ongoing study of the technical and financial impact of the early closure of the plant on PLN’s electricity system — currently being undertaken by PLN and ADB.
Latest Update:
12/2024
Project relations
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