Investor interest in Indonesia’s energy transition may suffer after first coal phase-out project scrapped

[SINGAPORE] Indonesia’s decision to cancel its first early coal retirement project involving the Cirebon-1 power plant will likely dampen investor confidence in the country’s energy transition, say sustainable finance observers.

“Because the Cirebon deal was structured around private financing, its cancellation could erode private-sector confidence in similar deals involving PLN-owned plants or independent power producer plants selling to PLN,” said Tiza Mafira, director of Climate Policy Initiative’s (CPI) Indonesia chapter.

The country’s state-owned utility company PLN recently announced that it is scrapping plans to bring forward the shutdown of the 660-megawatt Cirebon-1 coal-fired power plant, citing extremely high costs.