By Leika Kihara and Valerie Volcovici
NUSA DUA, Indonesia / SHARM EL-SHEIKH, Egypt – (Reuters) – Japan will help to fund Indonesia’s transition from coal-fired power to cleaner energy, the countries said on Monday, and invited others to join the collaboration, as part of Japan’s effort to reduce planet-warming emissions throughout Asia.
The announcement follows bilateral talks between Indonesia and Japan in Bali ahead of the Group of 20 (G20) summit, which begins on Tuesday. It also coincides with U.N. climate talks in Egypt, which have entered their second and final week.
Under the partnership, Japan will draw on funding from Japanese public and private institutions, including the state-affiliated Japan Bank for International Cooperation (JBIC).
Nippon Export and Investment Insurance and JBIC will support Indonesia state-owned utility PLN’s impementation of energy transition measures, the countries said in a statement.
The G7 more broadly is trying to accelerate the deployment of renewables and to limit the development of coal in Indonesia. The United States is expected to make public its energy transition plan with Indonesia on Tuesday, according to sources familiar with the issue.
Japanese Prime Minister Fumio Kishida floated the idea of an Asia Zero Emission Community (AZEC) earlier this year to help countries in the region collaborate on hydrogen and carbon capture technology that can reduce the amount of carbon dioxide released into the atmosphere while allowing the continued use of fossil fuel.
Domestically, resource-poor Japan has experimented with hydrogen to displace natural gas and with ammonia to replace some coal as it attempts to build global supply chains of potentially carbon-free future fuels.
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(Writing by Valerie Volcovici in Sharm El-Sheikh; editing by Barbara Lewis)
