POLICY BRIEF What Can Indonesia Learn from South Africa’s Experience of the Just Energy Transition Process? Anissa Suharsono, Martha Maulidia July 2023 Just Energy Transition Partnerships and the Importance of Accelerating Energy Transition Just Energy Transition Partnerships (JETPs) are essentially a financing mechanism agreed between a group of industrialized countries and a developing country, designed to fund a transition of the coal-dependent developing nation away from fossil fuel production and consumption toward low-carbon energy while addressing the social consequences involved. As of May 2023, JETP deals have been announced for South Africa, Indonesia, and Vietnam. In a nation where coal plays an important role in the economy, robust social and economic measures must be taken and included in the JETP plans, as transitioning away from coal will affect a significant portion of the population. Finance provided under the JETP may include grants, loans, and investments, and, as of March 2023, the donor group includes the International Partners Group (IPG) and the Glasgow Financial Alliance for Net Zero Working Group. The IPG represents the donor countries, made up of Canada, Denmark, the European Union, France, Germany, Italy, Japan, Norway, the United Kingdom, and the United States. The Glasgow Financial Alliance for Net Zero Working Group represents over 550 major financial institutions from 50 countries, such as HSBC and Citibank (Kusuma, 2023). The JETP scheme was first announced at the UN Climate Change Conference (COP 26) in November 2021. It was described at the time as a long-term partnership designed to support the Republic of South Africa in decarbonizing its energy system—preventing up to 1–1.5 gigatonnes of emissions over the next 20 years—and help the country accelerate its transition from coal to a low-emission, climate-resilient economy. It was launched with a funding commitment of USD 8.5 billion in the first phase of financing, with the comprehensive investment plan made public a few days before COP 27 (European Commission, 2022). © 2023 International Institute for Sustainable Development What Can Indonesia Learn from South Africa’s Experience of the Just Energy Transition Process? The second JETP deal was announced during the G20 Summit in November 2022. The IPG—led by the United States and Japan—pledged to mobilize USD 20 billion (around IDR 300 trillion) over the next 3–5 years to accelerate Indonesia’s energy transition through early retirement of coal power plants and deployment of renewable energy. The deal appears to herald a dramatic shift in energy policy, setting a new target for renewables—which will need to account for 34% of the country’s power production by 2030. Indonesia is currently in the process of preparing its comprehensive investment plan. This brief will assess the JETP process South Africa went through 1 year after it was announced to highlight any relevant findings and lessons to assist policy-makers implementing the Indonesian JETP. Process and Organizational Structure of South Africa’s JETP Since the announcement of the JETP at COP 26 in November 2021, several policy reforms that will benefit and enable the South African JETP have been started or announced. These reforms include the following: • an updated Climate Change Bill; • proposed changes to electricity sector regulations; • release of a Just Transition Framework and a just energy transition investment plan; • green hydrogen developments, including a Hydrogen Economy Roadmap; • the South African Green finance taxonomy and Sustainability and Climate Change Disclosure Guidance, with the carbon tax rate expected to increase progressively every year; • a National Mine Closure Strategy and discussion on South African Renewable Energy Master Plan; • further rounds of bids for renewable energy projects are underway, and the licensing threshold for new generation capacity has been raised to 100 MW, opening new ways for private sector investment in renewable energy projects (Presidential Climate Finance Task Team & IPG, 2022a, 2022b). Collectively, these policy measures aim to reduce barriers to clean energy deployment and to align energy policy with the agreed phase-down of coal generation. Despite the high-level agreement and moves toward policy reform, these reforms are still controversial. The South African JET Investment Plan (JET IP) was developed throughout the course of 2022, and it articulated the