Despite their promise, Just Energy Transition Partnerships risk entrenching climate injustice by relying on debt-heavy financing and falling short on equity, transparency, and inclusion.
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This article is part of the series—Jakarta Edit 2025
The first Just Energy Transition Partnership (JETP) was launched at the 2021 United Nations Climate Change Conference (COP26) in Glasgow, with a US$8.5 billion financing agreement between South Africa and the International Partners Group (IPG), a group of donor countries. The goal was to accelerate South Africa’s transition away from coal through a mix of financial instruments and technical assistance.
Following South Africa’s lead, a second group of countries, this time in Southeast Asia, established similar agreements, including Indonesia and Vietnam. Indonesia’s JETP, announced in 2022, pledged US$20 billion over three to five years from public and private sources. IPG members, including the US, Germany, and the EU, along with the Glasgow Financial Alliance for Net Zero (GFANZ), committed to providing financing for Indonesia’s transition, aiming to peak power emissions at 290 million metric tons of carbon dioxide equivalent (MtCO₂e) by 2030, increase the share of renewable energy to 34 percent, and achieve net-zero in the power sector by 2050.
That same year, Vietnam signed a US$15.5 billion JETP agreement with similar actors. Half of the funds would come from IPG governments, and the other half from GFANZ. Vietnam’s goals are to reduce electricity-sector emissions from a projected 240 MtCO₂e in 2035 to 170 MtCO₂e by 2030, increase the share of renewable energy to 47 percent of electricity output, limit coal power capacity to 30.2 gigawatt (GW), and begin phasing out coal-fired power plants.
In 2023, a third set of countries began JETP negotiations. Senegal signed a US$2.5 billion JETP agreement. Though often hailed as innovative tools for mobilising climate finance, the JETPs are unlikely to deliver on the “just” in just energy transitions.
In November 2023, Indonesia released its Comprehensive Investment and Policy Plan (CIPP), outlining investment priorities, policy reforms, and a just transition framework. Vietnam followed with its Resource Mobilisation Plan (RMP), detailing its goals and priority projects.
In line with its retreat from international cooperation and responsibility in March 2025, the Trump administration withdrew the US from the JETPs, relinquishing Washington’s co-leadership role in Indonesia’s partnership. In its place, Germany assumed leadership alongside Japan. The US had pledged US$3 billion, just a fraction of the total.
JETPs fail to address the historical inequalities underlying climate responsibility. Countries such as Indonesia and Vietnam have contributed a tiny fraction of cumulative global emissions, yet they are offered transition packages dominated by debt.
As of March 2025, Indonesia had received just US$1.1 billion of the promised funding. In Vietnam, three projects have secured funding, and a further four are under negotiation.
As a relatively new financial cooperation model, JETPs face several challenges. While it is undoubtedly true that countries, including Indonesia and Vietnam, require significant capital for climate mitigation and adaptation, JETPs will not be the route to a just transition.
First, JETPs fail to address the historical inequalities underlying climate responsibility. Countries such as Indonesia and Vietnam have contributed a tiny fraction of cumulative global emissions, yet they are offered transition packages dominated by debt. In Indonesia, 97 percent of JETP financing is comprised of loans, with only 3 percent provided as grants. Overall, just 60 percent of the financing is offered as concessional loans. In Vietnam, 96 percent of the funding is in the form of loans, with just 34 percent of the total being offered at concessional rates. This financial structure effectively shifts the burden of decarbonisation onto countries that bear limited responsibility for the climate crisis. Indonesia is responsible for an estimated 4 percent of all historical emissions, and currently accounts for less than 2 percent of the annual global total. In contrast, the United States, which is responsible for 20 percent of historical emissions, today emits 16 percent of the global total, despite comprising just four percent of the global population. From the standpoint of international climate justice and equitable financing, the JETPs in Indonesia and Vietnam are hardly pathways to a just transition. In order to be truly just, these financial instruments should mainly be comprised of grants, with a moderate reliance on concessional loans.
Second, a just transition will require significantly more capital. Currently, there are persistent gaps between the capital requirements of developing countries, the commitments made by high-income countries, and the actual disbursement of funds. The scale of finance committed through JETPs is drastically inadequate. Indonesia needs an estimated US$285 billion by 2030 to meet its conditional climate targets; JETP covers just 7 percent. Similarly, Vietnam needs US$368 billion by 2040 to achieve net-zero; JETP offers about 4 percent of that. Not only are the current commitments far short of what is required, but the actual disbursement has also been lacking. Concerns regarding climate justice extend beyond the composition of financial instruments and the scale of funding. Civil society organisations and communities affected by climate change have raised alarms about their limited participation in and the transparency of these agreements. A just transition requires input and involvement from the communities affected. While Indonesia’s JETP CIPP included a three-week public consultation period, the overall process has been criticised for a lack of engagement and transparency. Similarly, Vietnam has been criticised for not meeting commitments to conduct regular consultations.
A just transition will require significantly more capital. Currently, there are persistent gaps between the capital requirements of developing countries, the commitments made by high-income countries, and the actual disbursement of funds.
Moreover, the focus on centralised, large-scale energy infrastructure will likely displace local communities, harm ecosystems, and undermine equitable energy access. Distributed renewable energy systems, not megaprojects, offer a more straightforward path to inclusive energy access. However, the investment strategy in Indonesia, for instance, focuses solely on on-grid power. It only references the need for a study on community-based renewable energy systems, which are likely to prove critical to ensure energy justice in a country with over 17,000 islands.
Significant climate finance is urgently needed to support mitigation and adaptation efforts in countries like Indonesia and Vietnam. While JETPs present a new model for international cooperation, they fall short of enabling a truly just transition. Their heavy reliance on debt shifts responsibility away from historically high-emitting countries and onto those least responsible for the climate crisis. The overall scale of financing is inadequate, and disbursements have been limited, mirroring the broader failures of global climate finance. Meanwhile, the processes for identifying priorities and projects have excluded affected communities, with the lack of transparency and local participation undermining the principles of justice these partnerships claim to advance. Mobilising and deploying climate finance is essential, but the design of financial instruments, investment strategies, and implementation processes must align with the goals of a just transition.
Terri B. Chapman is a Research Fellow at the George Washington Institute of Public Policy (GWIPP), USA.
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