Indonesia was expected to pay twice—once to close the old system, again to buy power from the new one.
In the quiet reversal of a single coal plant's retirement in West Java, a much larger story announced itself: the world's most celebrated model for financing the end of coal in developing nations has yet to retire a single plant. Indonesia's Just Energy Transition Partnership, born of G20 ambition and $21.4 billion in pledged support, has collided with the enduring gap between elegant theory and the weight of sovereign debt, private risk aversion, and the political complexity of dismantling systems that entire economies depend upon. What unfolds here is not merely a policy setback but a reckoning with whether wealthy nations have offered developing ones a genuine partnership or simply a more sophisticated form of burden-shifting.
- Indonesia's December 2025 decision to keep Cirebon-1 running shattered the narrative that the Jet-P model was a working blueprint for global coal phase-out.
- Private capital, the engine the entire model depended upon, never arrived at scale — leaving a $97 billion funding need met by just $1.1 billion in disbursed public money.
- Over 97% of pledged funds came as loans rather than grants, forcing Indonesia to borrow against future revenues while simultaneously losing the coal income and jobs those plants currently provide.
- The model's demand for privatization and a weakened state directly contradicts the conditions under which other nations — China, Vietnam — actually succeeded in rapid energy transitions.
- Trade unions, civil society groups, and affected communities warn that the transition as designed shifts electricity from a public good to a commodity, with ordinary citizens absorbing the cost.
- Alternative frameworks — grant-based financing, the Bridgetown Initiative, state-led transitions — exist but remain sidelined, leaving coal-dependent nations watching a model that has not yet proven it can deliver.
In December 2025, Indonesia quietly decided not to retire the Cirebon-1 coal plant ahead of schedule. The decision barely registered in global headlines, but its implications were vast. Cirebon-1 was meant to be the centerpiece of a $21.4 billion international climate finance arrangement — the Just Energy Transition Partnership, or Jet-P — launched at the 2022 G20 summit in Bali. The United States, United Kingdom, Japan, and European Union had positioned it as a template for helping coal-dependent developing nations transition to clean energy fairly and at scale.
The theory was compelling: public money from wealthy nations would reduce investment risk enough to draw private capital in large quantities. Together, they would fund plant retirements, renewable replacements, and protections for workers and communities. But the private money never materialized. By early 2025, Indonesia had received only $1.1 billion of its pledged public funds, against an estimated need of $97 billion by 2030. The deal's fifty separate funding packages, each with its own rules and instruments, made accountability nearly impossible.
The structural problems went beyond the numbers. Closing a coal plant means buying out contracts, compensating investors for lost future profits, and replacing the electricity it produced — all in a country carrying mounting sovereign debt and powerful coal interests. Private investors saw risk, not opportunity. Public money could reduce some of that risk, but not enough.
The financing terms compounded the difficulty. Less than three percent of the $21.4 billion arrived as grants; the rest were loans Indonesia would have to repay. The country was effectively being asked to borrow money to shut down assets that currently generated revenue, then buy power from privatized companies that would replace them. Trade unions called it paying twice — and warned that electricity, once a public good, would become a commodity priced beyond ordinary reach.
Perhaps most telling was what the model demanded of the state itself. Nations that had moved fastest on clean energy — China, Vietnam — had done so through strong public institutions, industrial strategy, and directed investment. The Jet-P model pointed in the opposite direction: privatization, a reduced state role, and reliance on market forces. In Indonesia, this meant pressure to break apart the national electricity company, a prospect resisted across the political spectrum.
The failure of Cirebon-1's retirement left an uncomfortable question hanging over every coal-dependent nation watching from the sidelines: if this flagship model cannot deliver, what will? Grant-based alternatives and publicly led transitions exist in concept, but have gained little political traction among the wealthy nations with the resources to fund them. The longer that question goes unanswered, the more the promise of a just energy transition risks becoming a story told about the future that never quite arrives.
In December 2025, Indonesia made a quiet but consequential decision: it would not retire the Cirebon-1 coal power plant ahead of schedule. The announcement landed like a stone in still water, barely noticed at first. But the ripples extended far beyond one facility in West Java. Cirebon-1 was supposed to be the flagship of a $21.4 billion international climate finance experiment—a deal that wealthy nations had positioned as a model for the world.
The Just Energy Transition Partnership, or Jet-P, was born at the G20 summit in Bali in 2022. The idea was straightforward enough: the United States, United Kingdom, Japan, and European Union would provide public money to help Indonesia, the world's fourth-largest coal consumer, transition away from fossil fuels. Similar arrangements were struck with South Africa, Vietnam, and Senegal. The UK government called the Jet-Ps a template for how to support just transitions globally—a term meant to capture the promise that moving away from coal would be fair to workers and communities, not something imposed from above.
But the abandonment of Cirebon-1 exposed something fundamental about how the model actually works. The theory was elegant: public money from rich countries would reduce risk enough to attract private investment at scale. Governments and development banks would provide grants and cheap loans; private capital would follow, drawn by the reduced risk. Together, this money would fund an energy transition that delivered cleaner air, reliable power, and climate stability. Everyone wins.
Except the private money never arrived in the quantities promised. By early 2025, Indonesia had received only $1.1 billion of the public funds pledged. The country's own estimates suggested it needed $97 billion in investment by 2030 to decarbonize its electricity system. The gap was cavernous. Worse, the fifty separate funding packages within the Indonesian Jet-P, each with its own financial instruments and accounting rules, made it nearly impossible to track where money actually went or how much had been spent.
The structural problem ran deeper. Decommissioning a coal plant is not like building one. It requires buying out existing contracts, compensating investors for profits they will no longer earn, and renegotiating complex legal agreements. The electricity that plant produced still needs replacement—which means further investment in generation systems that may not yet exist. Private investors, facing these complexities in a middle-income country with a state-owned electricity company, powerful coal interests, and mounting sovereign debt, saw risk rather than opportunity. Public money could sweeten some deals, but it could not erase what investors perceived as political and economic danger.
There was another dimension to the burden. Of the $21.4 billion pledged to Indonesia, only 2.6 percent came as interest-free grants. The rest arrived as loans that Indonesia would have to repay. The state was being asked to borrow more money to close coal assets that currently generated government revenue and employment, then purchase renewable electricity from privatized companies that would replace them. In the language of those who studied the deal, Indonesia was expected to "pay twice." Trade unions were blunt about what this meant: electricity would shift from being treated as a public good to being treated as a commodity, and ordinary Indonesians would pay more for it.
The Jet-P model also weakened the very state institutions needed to manage an energy transition. Countries that had achieved rapid clean-energy transformations—China, Vietnam—had done so through strong state-owned enterprises, clear industrial strategies, and the ability to direct investment and discipline business. The Jet-Ps were designed around the opposite: a diminished state and a central role for private capital. In Indonesia, this meant pressure to break up the national electricity company and sell off its assets—a prospect fiercely resisted by trade unions, civil society, and even wealthy groups who profited from the existing system.
The failure to retire Cirebon-1 suggested something uncomfortable: the world's flagship model for financing the end of coal in developing nations might not work. Alternatives existed—larger grant-based financing, the Bridgetown Initiative proposed by Barbados's prime minister, even publicly-owned and worker-led transitions. But these ideas had gained little traction. The longer the world waited to acknowledge the Jet-P model's limitations, the harder the transition would become—not just for Indonesia, but for every coal-dependent nation watching to see if international climate finance could actually deliver on its promises.
Notable Quotes
The Indonesian state is expected to pay twice—once to close the old system, and again to buy power from the new one.— Researcher studying the Jet-P model
Trade unions warned that under the Jet-P model, electricity will no longer be treated as a public good, but as a commodity that ordinary Indonesians will pay more for.— Indonesian trade unions
The Hearth Conversation Another angle on the story
Why did Indonesia walk away from closing this one plant? Was it simply a matter of money?
Not simply. The money was part of it—they needed $97 billion by 2030 and had only received $1.1 billion. But the real problem was structural. Closing a coal plant means buying out contracts, compensating investors, and replacing the electricity it produced. Private investors saw too much risk and too little return.
So the public money was supposed to make it attractive to private investors. Why didn't it?
Because private capital moves where returns are highest and risks lowest. Indonesia has state-owned utilities, powerful coal interests, and mounting debt. Public money can reduce risk, but it can't erase what investors see as fundamental political and economic danger.
What about the workers? What happens to them?
That's where the model becomes painful. The deal was supposed to be a "just transition," but most of the financing comes as loans Indonesia has to repay. The state closes the coal plant, loses that revenue, then buys power from privatized companies at higher cost. Electricity becomes a commodity instead of a public good. Workers lose jobs, and ordinary people pay more.
Is this unique to Indonesia, or is this happening with the other deals?
It's happening across all four countries with these partnerships—South Africa, Vietnam, Senegal. Private money hasn't materialized at scale anywhere. The model assumes private capital will step in once public money reduces risk. It hasn't.
What would actually work?
Countries that have managed rapid clean-energy transitions did it through strong state-owned enterprises and clear industrial strategies. They directed investment and disciplined business. The Jet-P model does the opposite—it weakens the state and puts private capital in charge. Some propose much larger grants, others propose state-led transitions. But these ideas haven't gained traction yet.