Jakarta, 8 October 2025 – Climate Policy Initiative (CPI) today launched its latest report, “Investment Needs of Indonesia’s Just Energy Transition: A Framework,” offering first-of-its-kind country-specific financing methodology tailored to Indonesia’s unique transition pathway. The report provides a comprehensive framework for quantifying all investment needs that ensure a just, equitable, and sustainable energy transition, while supporting the nation’s bold renewable energy targets.
The Government of Indonesia, through state-owned utility PT PLN, aims to add renewable energy capacity to account for 61% of total new power generation in the 2025–2034 Electricity Supply Business Plan (RUPTL). This marks the highest share of renewable energy ever included in the history of the RUPTL. The effort aligns with the government’s commitment to achieve Net Zero Emissions by 2060. Meeting these commitments requires not only massive investment but also mechanisms that safeguard fairness for communities, workers, and industries affected by the shift away from fossil fuels.
“This framework recognises that a just transition in Indonesia cannot simply be imported from other advanced economies,” said Barbara Buchner, CPI Global Managing Director. “Indonesia’s energy transition must reflect its own realities: the vision that communities have for their own future, opportunities derived from of its vast renewable potential, and the need for equitable policies that place local economic strength at the heart of the transition.”
Built on the four pillars of a just energy transition — recognitional justice, restorative justice, distributive justice, and procedural justice — the framework is specifically tailored to Indonesia’s socio-economic realities and addresses both the risks of early coal retirement and broader socioeconomic opportunities presented by renewable energy development. It further strengthens the government’s Just Transition concept under the Just Energy Transition Partnership (JETP), particularly the Just Transition Framework, which embeds the principle of economic transformation.
With regard to measures under restorative justice, the framework emphasises a balance between preventative actions, such as reskilling programs to help coal workforce transition to green jobs, and transformative actions, such as setting up job service centers to prioritize local hires, renewable energy cooperatives to optimize productive use of energy, and diversification of local economies. By investing in both measures today, Indonesia will have the advantage of not only reducing future costs but also making the energy transition process more feasible, equitable and beneficial to all stakeholders and affected communities.
Benefits of Investing in Just Energy Transition: From Cirebon to Maluku
CPI has developed a method that enables regions to calculate the economic benefits of energy transition in terms of GDP and income growth, as well as the level of investment required. CPI piloted this method in Maluku and Cirebon, and it can be replicated across other provinces.
This new study introduces an analytical framework for the early retirement of the Cirebon 1 coal-fired power plant (CFPP), showing how planned transition investment can help mitigate worker displacement and create new sources of growth. Previous studies have estimated the number of workers affected by Cirebon’s early retirement. CPI built upon this by adding a framework to calculate the economic opportunities created when Cirebon shifts toward renewable energy, which opens pathways for local economic diversification.
The potential for economic optimisation is further evident in CPI’s assessment of how solar power can improve Maluku’s fishery sector by replacing diesel-powered cold storage with more reliable, renewable electricity. The solar-powered cold storage not only reduces emissions but also deliver catalytic impact through fish preservation, with the potential of boosting fishermen’s daily catch from 50 tons currently to 214 tons and significantly increasing fishermen’s income from IDR 43 million to IDR 368 million. The total annual revenue of IDR 53 billion outweighs the IDR 10 billion cost of the transition itself.
“These examples demonstrate how just energy transition finance can deliver tangible socioeconomic and climate benefits.” said Tiza Mafira, CPI Indonesia Director. “The Maluku case proves that renewable energy, when linked to local industries like fisheries, can generate far greater net benefits than fossil fuels ever could. The Cirebon case illustrates the need for a structured financing framework to manage coal retirements responsibly while delivering net economic benefits.”
