ADB and Indonesia Partners Sign Historic MOU on Early Retirement Plan for First Coal Power Plant
Under the ADB's Energy Transition Mechanism (ETM), the Asian Development Bank (ADB) signed an agreement with key partners in Indonesia to look into the early retirement of the first coal-fired power plant owned by an independent power producer (IPP).
The MOU says that more in-depth talks will be held to speed up the closing of the 660-megawatt CEP plant in West Java called Cirebon-1.
The planned transaction aims to reduce carbon dioxide emissions by a lot by using a model that can be used by other IPPs in Indonesia, in other parts of Asia and the Pacific, and even in other parts of the world.
ADB President Masatsugu Asakawa said:
"This MOU with our trusted partners in Indonesia is a landmark moment for ADB’s Energy Transition Mechanism and the clean energy transition it will advance. As the climate bank for Asia and the Pacific, ADB is proud to show that this approach works, which is made possible by the great leadership of Indonesia. We encourage other financial stakeholders to engage in the just and affordable energy transition here and across Asia and the Pacific."
Cirebon Electric Power (CEP) President and Director, Hisahiro Takeuchi, said:
"ETM provides an innovative approach for companies like CEP to make the transition from coal to clean energy while providing reliable and affordable power for Indonesia’s energy infrastructure. This MOU is a big step forward for Indonesia, and we are proud to be working with the Asian Development Bank and Indonesian Investment Authority.”
ETM is a regional, transformative, blended-finance programme that aims to speed up the closing of coal-fired power plants and replace them with plants that use clean energy.
ETM is one component of a larger set of domestic and global activities aimed at assisting Asia and the Pacific in mitigating the worst effects of climate change, such as extreme sea level rise and damaging weather events.
At the same time the MOU was signed, Indonesia launched its ETM Country Platform, which is a government framework for financing and investing that will fund and manage the country's energy transition activities.
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