A provisional agreement was reached between Indonesia and the Asian Development Bank (ADB) to close the Cirebon-1 coal-fired power plant about seven years ahead of schedule.
Reuters reported that this agreement is the first one made under the ADB’s Energy Transition Mechanism (ETM) initiative, which aims to assist countries in reducing their carbon emissions that contribute to climate change.
Within the framework deal signed by ADB, Indonesian state-owned power utility company PT PLN, independent power producer PT Cirebon Electric Power (CEP), and the Indonesia Investment Authority (INA), the 660-megawatt (MW) plant will now conclude in December 2035, a shift from the initially scheduled date of July 2042.
The bank is hoping to replicate the $20 billion Just Energy Transition Partnership, which was established last year to push the sector’s peak emissions date forward to 2030, in other countries in the region.
When the plant opened in 2012, it was anticipated to operate for an additional 40 years; however, retiring it in 2035 would prevent the site from emitting greenhouse gases for more than 15 years.
Currently, ADB is evaluating transactions in two additional countries and has active EMT projects in the Philippines, Pakistan, Vietnam, and Kazakhstan.