The UK and Indonesia have agreed to establish an economic growth partnership to facilitate bilateral trade and investment in areas including clean energy. The countries aim to strengthen regulatory co-operation and joint activities for decarbonising supply chains, as well as green financing.

The countries have agreed to co-operate on grid connectivity and transmission for the development of Indonesia’s “Green Enabling Super Grid” project, according to a statement on 20 January. The project is designed to address the geographic mismatch between renewable energy source centres and demand centres by strengthening the national power grid and developing interconnections. The UK has expertise in electrical grid design, construction, transmission and system operation and will seek to share best practice information on these aspects where possible.

In turn, Indonesia will consider the participation of UK businesses in Green Enabling Super Grid projects, such as the Java-Bali connection, the Java-Sumatra connection and other renewable energy projects.

The UK can support Indonesia’s target to develop 42.6GW of new and renewable energy power plants as outlined in the latter’s 10-year power plan (RUPTL) for 2025-34, the statement said, and the countries aim to identify opportunities for UK and Indonesian businesses to participate in related projects.

The countries may also discuss potential project finance support, including through UK Export Finance, the UK’s export credit agency. “Indonesia and the UK welcome greater participation from financial institutions and private sector players to accelerate Indonesia’s transition to renewable energy,” the statement said.

The UK has partnered with multiple countries including Indonesia under the Partnering for Accelerated Climate Transitions (UK PACT) programme, which is governed and jointly funded by the UK’s Foreign, Commonwealth and Development Office and Department for Energy Security and Net Zero.

Under the Indonesia-UK PACT fund, the UK has agreed to provide £14.2mn ($19.08mn) to support energy efficiency, as well as the development of low-carbon transport.

Other areas of co-operation identified in the latest agreement include agricultural trade, transport infrastructure development in Indonesia to lower logistics costs and carbon emissions, and driving economic growth.

Source: Argus by Prethika Nair