Indonesia has set ambitious climate and energy targets, reflected in President Prabowo’s commitment to achieve 100% renewable energy use by 2035 as part of the national net-zero emissions goal. This has also somewhat been reflected in the latest RUPTL where renewable energy has the largest share (61%) of planned construction. Ahead of COP30 in Brazil, this climate commitment has been reiterated. Nevertheless, limited fiscal space remains a major challenge, making foreign direct investment (FDI) a crucial catalyst for the green transition. In this context, China, as one of Indonesia’s largest investors, has increasingly shifted its energy financing from coal to renewable energy. In 2024, Indonesia received approximately USD 9.3 billion from the Belt and Road Initiative (BRI), with USD 900 million allocated to the energy sector, of which 56% flowed into renewable energy projects, up significantly from around 14% during the 2006–2022 period.
Chinese investment needs to be more closely aligned with job creation and reindustrialization agendas through more localized and sustainable investment models. Based on analysis by SUSTAIN and CERAH, if BRI energy financing of USD 900 million per year were fully directed to renewable energy over the 2025–2034 period, Indonesia could potentially mobilize up to IDR 144 trillion as an alternative source of energy transition funding. This amount is equivalent to financing around 80 projects on the scale of the Cirata Floating Solar Power Plant, with a combined capacity of 15,300 MWp and a potential emissions reduction of 17.12 million tons of carbon, while creating up to 112,000 jobs and supplying electricity to around 4 million households. In addition, referring to BYD’s EV factory project in Subang, an investment of USD 5.2 billion (IDR 83.2 trillion) could potentially create 72,000 direct jobs, excluding indirect impacts from local supply chains and supporting sectors.
