Jakarta, March 10, 2021-Indonesia state-owned electricity company, PT PLN, has announced contract termination for CPP(Coal-Fired Power Plant) construction projects that have not yet reached the financial closing stage.[1] However, projects that will be discontinued are not described in detail. Big questions arise about the consistency of PLN’s new commitments related to the termination of this coal power plant projects.
Currently, several CPP (Coal-Fired Power Plant) projects have not been financially closed. For instance in West Java, the CPP Indramayu 2 project with 1×1000 MW capacity and CPP Tanjung Jati A with 2×660 MW capacity in Cirebon, West Java.
Advocacy and Campaign Manager of Indonesian Forum for the Environment (WALHI) West Java, Wahyudin, argued that the central government’s plan to build CPPIndramayu 2 is no longer relevant because the West Java people’s electricity needs have been fulfilled.
“For a long time, the public has urged the government to stop two projects’ construction. This is due to negative impacts of these projects on the environment of land, sea, air, and people’s livelihoods as well as the greenhouse gases emissions which will lead to an increase in the rate of climate change,” he added.
CPP Indramayu 2 has changed the function of productive agricultural land covering an area of 275.4 hectares. As a result, 790 farm workers lost their jobs which were the root of their culture. Not to mention that they are currently living under the shadow of the threat of air pollution from the CPP Indramayu 1 which is already operating. Meanwhile, the CPP Tanjung Jati A Cirebon has converted a productive salt pond area of 230 hectares. As a result, about 224 salt farmers lost their source of livelihood.
Besides, there is a major concern to stop coal-fired power plant construction due to many power plants existing and excess electricity production. [2] This has had a major impact on the wasteful financial condition of PLN. [3]
“PLN should not only target the termination of CPPs development projects that have not reached the financial closing but also stop constructing CPP projects that are in the early stages of development as a form of serious commitment to energy transition and comprehensive energy transformation,” said Andri Prasetiyo, Program Manager of Trend Asia.
He is also concerned that PLN must be transparent about the list of CPP projects that will be terminated in this latest commitment.
“PLN must immediately take concrete steps to identify and disclose the data to the public regarding which CPP construction projects will be terminated. This is to prevent the risk of bribery and corruption by interest groups,” he demanded.
At the same time, the Japan Bank for International Cooperation (JBIC) through its official website stated withdrawing itself from financing the coal business. [4] This Japanese financial institution also played a key role in financing the Cirebon 2 coal-fired power plant expansion, with a capacity of 1×1000 MW.
JBIC’s commitment to quitting the coal power plant business is too late. JBIC only taking action to stop when there were no CPP projects currently funded in Indonesia, the last project was CPP Cirebon 2. This JBIC-funded project has dragged the Japanese financial institution to environmental destruction and the loss of the livelihoods of hundreds of salt farmers. Besides, the sovereignty of the fishermen’s fishing area and cultivators of seashells is shrinking.
“In general, we welcome JBIC’s statement or commitment that it will not provide its support for any new coal plants abroad. However, to be consistent with the Paris Agreement’s goals, JBIC must immediately stop its disbursement for the ongoing construction of coal plants in Indonesia, such as Cirebon 2. Not only from the climate viewpoint, the finance for dirty business also needs to be cut. All the finance flow in Cirebon 2 must be transparent and proven,” said Hozue from Friends of the Earth Japan.
To that end, we urge:
- PLN must clarify and carry out its commitments by keeping promises to stop all coal power plant projects that have not reached financial closing including CPP Cirebon 2 and Indramayu 2.
- PLN must consider other important factors besides the price of renewable energy production, namely overcapacity conditions, the state financial crisis, the climate crisis, and the socio-ecological impacts, especially the health of citizens and the environment.
- PLN also has to stop coal power plant projects that are still in the early stages of development.
- JBIC must withdraw its funding support for the Cirebon 2 CPP expansion project as evidence of its global commitment to stop funding coal power plant projects.
- Various other coal funders do not repeat JBIC’s pattern of committing, and immediately take action to stop their support for coal projects in Indonesia.
CPP Cirebon’s footage (courtesy of WALHI West Java) -> https://s.id/yJvb2