COP28 win for ADB as IIA agrees to shut coal-fired power station
The Asia Development Bank (ADB) confirmed to Net Zero Investor this morning that the Indonesia Investment Authority (IIA), the sovereign wealth fund of Indonesia, has agreed to shut the country’s largest coal-fired power station.
The $26 billion IIA, majority owner of the Cirebon-1 power station, has dropped any objections to close the energy facility seven years earlier than planned, said David Elzinga, energy principal at the ADB.
“If we don’t address these coal plants, we’re not going to meet our climate goals,” Elzinga said from the COP28 summit in Dubai.
He stressed this is the first deal under the ADB’s new Energy Transition Mechanism program, which aims to stimulate countries and investors to cut their climate-damaging carbon emissions and implement climate-friendly policies and strategies.
The ETM program is, so far, supported by Indonesia, Kazakhstan, Pakistan, the Philippines and Vietnam.
“By doing this pilot transaction, we are learning what it takes to make this happen,” Elzinga shared with Net Zero Investor.
“We’re very much shaping this as something we want to take to other countries,” he stressed.
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The deal was possible after the IIA agreed to shut the plant, with the backing of state-owner power utility company PT PLN, the firm that runs the facility.
The IIA is the sovereign wealth fund of Indonesia, founded in 2021 and it currently has around $24 billion in assets under management.
Only opened in 2012, Cirebon-1 is a major power supplier to the country’s capital, Jakarta. Initially expected to be in operation until July 2042, parties agreed to close the plant now in December 2035.
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