MANILA - The Philippines, Indonesia and the Asian Development Bank on Wednesday that they are partnering to set up an Energy Transition Mechanism (ETM) to cut carbon emissions in the 2 Southeast Asian countries.
The ETM Southeast Asia Partnership is the first of its kind in the Asia Pacific region and aims to help accelerate Southeast Asia’s clean energy transition, ADB said.
Japan’s Ministry of Finance also said it was committing a grant of $25 million to ETM, the first seed financing for the mechanism.
“Indonesia and the Philippines have the potential to be pioneers in the process of removing coal from our region’s energy mix, making a substantial contribution to the reduction of global greenhouse gas emissions, and shifting their economies to a low-carbon growth path,” said said ADB President Masatsugu Asakawa.
ADB said it will work with government stakeholders in the 2 countries to pilot ETM by jointly conducting a thorough feasibility study focusing on the optimal business model for each pilot country toward decarbonization.
“ETM is an ambitious plan that will upgrade Indonesia’s energy infrastructure and accelerate the clean energy transition toward net-zero emissions in a just and affordable manner,” said Indonesian Finance Minister Sri Mulyani Indrawati.
“A clean energy transition in the Philippines will create jobs, promote national growth, and lower global emissions," said Philippine Finance Secretary Carlos Dominguez III.
Some 67 percent of Indonesia's electricity and 57 percent of the Philippines' power generation comes from coal, ADB said.
A full scale-up of ETM in Indonesia, the Philippines, and possibly Viet Nam, which aims to retire 50 percent of the coal fleet over the next 10 to 15 years, could cut emissions equivalent to taking 61 million cars off the road, the multilateral lender said.