About the German-Indonesian Energy Cooperation
Supporting Indonesia’s Energy Transition
Indonesia’s commitment to the energy transition is part of its Golden Indonesia 2045 programme to become an advanced country. President Prabowo Subianto has laid out an ambitious vision for this transition: net-zero emissions (NZE) by 2060, 75GW of new renewable energy capacity, and the phasing out of coal by 2040.. This bold move highlights the nation’s commitment to combating climate change and transitioning to a more sustainable energy future. However, such a transition requires not only technical innovation but also strong partnerships to ensure that no one is left behind, and that the transformation is both efficient and inclusive. This is where the German-Indonesian Energy Cooperation comes into play. It was established to consolidate capacities among key stakeholders, provide essential technical assistance, and ensure the successful implementation of energy transition initiatives in Indonesia.
Germany has long been a valued partner in Indonesia’s energy sector, with a history of over 30 years of cooperation. The partnership began with rural electrification programs and has since evolved into a comprehensive collaboration that supports a range of energy transition initiatives. The German technical and financial cooperation now covers a broad portfolio, addressing key areas such as public infrastructure projects, sector reform financing, policy advice on renewable energies and carbon pricing, technology cooperation and innovation, and the development of quality infrastructure in the solar energy sector. Germany also plays a critical role in vocational education and training, ensuring competence development and creating employment opportunities within the energy sector. Through these efforts, Germany remains a crucial partner in driving Indonesia’s energy transition forward by focusing key areas below.
Key Priorities of Cooperation
GER-IDN Cooperation Priorities
RE Expansion
This action area supports increasing renewable energy capacity from base-load sources like hydropower and geothermal, and variable sources such as solar PV and wind, as well as bioenergy. It directly contributes to raising the renewable share in the electricity mix and reducing CO₂ emissions. Besides a focus on the power sector, renewable energy upscaling is further supported within industries and the built environment. Efforts also promote quality infrastructure for solar and wind value chains to improve performance and local industry competitiveness. Training and capacity building target a broad range of stakeholders to support planning and operation of sustainable energy solutions. Regulatory frameworks for renewable energy are also a central element, and therefore there is a strong link with action area “Energy Regulations”. German support (BMZ and IKI) includes both technical and financial support, provided through different implementing agencies, including KfW, GIZ, PTB, Guidehouse, and Consortium partners across the IKI portfolio.
Grid Extension
Investments focus on expanding smart grids to connect renewable generation with minimal losses and distribute electricity efficiently. Grid infrastructure improvements help reduce transmission losses and integrate variable renewables. Accompanying technical assistance supports the national utility in managing grids with high RE shares and explores measures like power plant flexibility to better match supply and demand. The cooperation with PLN plays a crucial role. These interventions contribute to emission reductions and the transformation of the power system. German support in this area is mainly provided by BMZ, through KfW financial assistance. however, there are strong linkages to technical assistance programs, e.g. by GIZ, that support PLN on power system planning and operation related questions.
Energy Efficiency
This approach promotes cross-sectoral reductions in energy use, especially in high-consuming sectors like industry, buildings, or mining. With rising demand projected, energy-efficient technologies and decarbonising industrial processes are key to achieving national climate goals. Support includes regulatory and financial frameworks, innovation, and integration of efficiency into development strategies. These measures help reduce electricity demand and CO₂ emissions while supporting national climate commitments. German support (BMZ and IKI) includes both technical and financial support, provided through different implementing agencies, including KfW, and GIZ, and Consortium partners across the IKI portfolio.
Energy Regulations
This area supports ministries with policy advice and capacity building to improve the regulatory framework for a just and sustainable energy transition. Focus areas include renewable energy tariffs, carbon pricing, subsidy reform, and managing transitions in coal regions—with attention to women, youth, and affected communities. Regulatory changes developed through policy dialogue are expected to bring long-term impacts, enabling fossil fuel phase-out and boosting renewable energy uptake.
History
Indonesia and Germany’s Cooperation
The cooperation between Germany and Indonesia, particularly in the energy sector, has a long and fruitful history, evolving from early support in areas like rural electrification to a comprehensive partnership addressing the energy transition. Over the decades, Germany’s contributions have expanded to cover a wide range of energy-related initiatives, such as renewable energy policy advice, carbon pricing, and technology cooperation. Germany has been a key partner in supporting Indonesia’s energy transition, a partnership based on mutual interest in advancing sustainable energy solutions. As Indonesia aims for net-zero emissions by 2060, the German-Indonesian Energy Cooperation has become crucial, with Germany providing the necessary technical assistance and consolidating capacities among stakeholders to ensure the successful implementation of energy transition projects across the nation.
This growing alignment of interests in the energy sector highlights the strong foundation of the partnership, which has been built over 30 years. As Indonesia seeks to transform its energy sector, Germany’s involvement is seen as a critical asset, not just in terms of financial and technical support, but also through its expertise in public infrastructure projects, sector reforms, and technology innovation. Indonesia’s energy sector transformation aligns with Germany’s commitment to sustainable energy development, and both countries are working together to ensure that the transition is inclusive, efficient, and benefits all stakeholders. This cooperation is central to Indonesia’s ambition to build a more sustainable energy future, while Germany continues to play a leading role in supporting global energy transitions.
Who We Are
German Partners
The Federal Ministry for Economic Cooperation and Development (BMZ)
The Federal Ministry for Economic Cooperation and Development (BMZ) is a key German government agency responsible for overseeing Germany’s development cooperation efforts worldwide. BMZ works to promote sustainable development, poverty reduction, and climate action through strategic partnerships with developing countries. Its goal is to support global efforts to achieve the United Nations’ Sustainable Development Goals (SDGs) by providing financial resources, technical expertise, and policy advice.
In Indonesia, BMZ supports various development initiatives, primarily through GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit). Through these programs, BMZ funds projects focused on improving energy access, promoting renewable energy, and supporting sustainable economic development. BMZ’s initiatives also aim to enhance climate resilience, reduce poverty, and improve living conditions in underserved areas. This cooperation helps Indonesia transition towards a more sustainable, low-carbon economy while strengthening the bilateral relationship between Germany and Indonesia in the areas of development and environmental sustainability.
The International Climate Initiative (IKI)
The International Climate Initiative (IKI) is a key element of Germany’s international climate finance commitment, providing support to developing and emerging countries in line with the Paris Agreement. Since its inception in 2008, IKI has funded over 950 projects, with a total investment nearing €6 billion. As of 2022, IKI is managed by the Federal Ministry for Economic Affairs and Energy (BMWE), in close collaboration with the Federal Ministry for the Environment, Climate Protection, Nature Conservation and Nuclear Safety (BMUKN) and the Federal Foreign Office (AA). These ministries work together to support partner countries in mitigating climate change impacts, conserving natural carbon sinks, and promoting biodiversity, aligning with the Convention on Biological Diversity (CBD).
In Indonesia, IKI plays a significant role in the country’s energy transition by supporting projects that promote the shift towards renewable energy and help reduce carbon emissions. The initiative collaborates with local stakeholders to implement policies and technologies that support Indonesia’s commitment to reducing greenhouse gas emissions in line with its Nationally Determined Contributions (NDCs) under the Paris Agreement. IKI’s involvement includes funding renewable energy projects, improving energy efficiency, and fostering innovations in clean energy technologies. The initiative also supports efforts to mitigate deforestation and degradation, which are critical aspects of Indonesia’s climate action plan, helping to align local efforts with global environmental goals.
Indonesian Partners
The Ministry of Energy and Mineral Resources (MEMR)
The Ministry of Energy and Mineral Resources (MEMR) is the central authority responsible for Indonesia’s energy governance. It develops and implements policies on energy security, renewable energy deployment, energy efficiency, and regulatory reform. As the lead technical institution, MEMR ensures that energy transition strategies are integrated into national energy planning and infrastructure development. MEMR also plays a pivotal role in facilitating pilot programs, aligning sectoral targets with climate commitments, and coordinating with sub-national agencies.
Ministry of National Development Planning (Bappenas)
The Ministry of National Development Planning (Bappenas) provides strategic direction to ensure energy transition aligns with Indonesia’s broader development agenda. Through long-term vision documents like the National Medium-Term Development Plan (RPJMN), Bappenas embeds clean energy and climate goals into cross-sectoral policy planning. The institution also plays a key role in promoting low-carbon development, coordinating development cooperation frameworks, and ensuring that energy transition strategies are economically inclusive and socially just.
The Ministry of Finance (MoF)
The Ministry of Finance is instrumental in ensuring that climate and energy policies are financially feasible and supported by sustainable investment pathways. The ministry designs fiscal policies, climate budget tagging systems, and blended finance mechanisms to support the implementation of the energy transition. It mobilizes domestic and international resources—such as green bonds, climate funds, and development financing—to accelerate the adoption of low-emission technologies and infrastructure upgrades.
Implementing Organisations
Deutsche Gesellschaft für Internationale Zusammenarbeit
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is Germany’s leading international cooperation agency, working on sustainable development projects across various sectors. Operating globally since 1975, GIZ provides technical expertise and advisory services to support the achievement of the 2030 Agenda for Sustainable Development and international climate agreements like the Paris Agreement. GIZ works in partnership with governments, private companies, and local stakeholders, addressing issues ranging from economic development and education to environmental sustainability and climate protection. It focuses on implementing projects that promote inclusive, sustainable development in countries across Asia, Africa, and Latin America, aligning with global goals and national priorities.
In Indonesia, GIZ plays a pivotal role in supporting the country’s transition to a sustainable energy future. Through its energy cluster, GIZ partners with key Indonesian institutions, including the Ministry of Energy and Mineral Resources (MEMR) and BAPPENAS (National Development Planning Agency), to implement projects that focus on increasing renewable energy capacity and improving energy efficiency. GIZ supports Indonesia’s efforts to meet its climate commitments, including its target for net-zero emissions by 2060, by promoting clean energy technologies such as solar, wind, and geothermal. GIZ’s work includes enhancing energy policy frameworks, building capacity in renewable energy projects, and fostering innovations in energy solutions that drive decarbonization. Through these efforts, GIZ is helping Indonesia develop a sustainable, low-carbon energy system while contributing to the country’s broader environmental and climate goals.
Kreditanstalt für
Wiederaufbau
KfW Development Bank is a central pillar of Germany’s development cooperation, operating under the guidance of the Federal Ministry for Economic Cooperation and Development (BMZ). It provides financial support to developing and emerging countries to foster sustainable economic, social, and environmental development. As part of the KfW Group, the bank implements Germany’s development policy through concessional loans, grants, and promotional instruments, addressing global challenges such as climate change, poverty reduction, and infrastructure development. With decades of experience, KfW manages a portfolio worth over €80 billion, spanning sectors including renewable energy, education, healthcare, and governance. Its approach emphasizes long-term partnerships, ownership by partner countries, and alignment with international frameworks such as the Agenda 2030 and the Paris Agreement.
In Indonesia, KfW Development Bank plays a critical role in advancing the country’s energy transition by financing large-scale investments in sustainable and low-emission energy systems. In collaboration with the Government of Indonesia and local stakeholders, KfW supports the development of renewable energy sources, particularly geothermal, hydropower, and solar energy, to reduce reliance on fossil fuels and lower greenhouse gas emissions. These efforts align with Indonesia’s Nationally Determined Contributions (NDCs) and long-term decarbonization goals. KfW also promotes energy efficiency, funds improvements in electricity transmission and distribution infrastructure, and facilitates regulatory reforms and technical innovations to foster an enabling environment for clean energy development. Through its targeted support in the energy sector, KfW significantly contributes to Indonesia’s ambition to build a resilient, inclusive, and low-carbon energy future, while reinforcing global commitments to sustainable development and climate action.
Physikalisch-Technische Bundesanstalt
The Physikalisch-Technische Bundesanstalt (PTB) is Germany’s national metrology institute, responsible for maintaining and developing measurement standards across a wide range of fields, including time, frequency, electricity, magnetism, and environmental measurements. Established in 1887, PTB plays a critical role in ensuring the accuracy and consistency of measurements for scientific research, industry, and public welfare in Germany. It also conducts research in quantum technologies, materials science, and metrology-related fields, contributing to advancements in precision technology and international measurement standards.
In Indonesia, PTB collaborates with various governmental and private sector institutions to enhance the country’s measurement infrastructure, supporting the development of reliable and accurate measurement systems for industries such as energy, manufacturing, and environmental monitoring. PTB’s expertise helps Indonesia improve its scientific research capabilities and ensures the country’s compliance with international metrology standards. By providing technical assistance, training, and research support, PTB contributes to Indonesia’s efforts to strengthen its national metrology system, which is essential for fostering innovation, improving industrial standards, and boosting international trade and cooperation.
Secretariat
The Energy Hub
The Indonesian-German Energy Cooperation Hub (Energy Hub, EH) is a platform set up in April 2023 with the objective to streamline representation of the broad joint energy portfolio and strengthen exchanges between Indonesia and Germany. The Energy Hub is a central nexus that connects energy cooperation endeavours between Indonesia and Germany. Building upon more than 30 years of bilateral energy cooperation, the Energy Hub also demonstrates the increased importance that both countries put towards cooperation in the energy field (e.g., through the Just Energy Transition Partnership/JETP), and the increased need to further consolidate and coordinate this cooperation. The Energy Hub is financed by two German ministries, the Federal Ministry of Economic Cooperation and Development (BMZ) and the Federal Ministry for Economic Affairs and Climate Action of Germany (BMWK), through its International Climate Initiative (IKI), making up “Team Germany”. On the Indonesian side, key partners include all implementing partners of financial and technical cooperation: The Ministry of Energy and Mineral Resources (MEMR), The Ministry of National Development Planning/Bappenas and The Ministry of Finance.
Supporting Energy Transition
Support to JETP
Indonesia has embarked on a challenging journey to shift away from a dependence on fossil fuels toward cleaner, more sustainable energy sources. This transformation is essential to guarantee energy security and deliver on climate goals. To catalyze investments into renewable energies, regulatory adjustments are necessary.
Notable achievements supported by the program to date include among others the formation of an energy transition task force and key regulatory advancements aimed at scaling up renewable energy, like the Ministerial Regulations to support rooftop solar PV integration, the establishment of the basis for carbon trading with emissions, as well as the assignment of emission ceilings to power plants.
The Just Energy Transition Partnership (JETP) is a landmark agreement forged during the G20 Leaders’ Summit in Bali in November 2022 between Indonesia and the International Partners Group (IPG), co-led by Germany and Japan. JETP aims to mobilize USD 20 billion in support of Indonesia’s clean energy transition.
Visit the JETP Secretariat website for more details.
