# Indonesia relaxes its local content requirements to encourage investments in green energy

- Link: https://www.thailand-business-news.com/asean/166268-indonesia-relaxes-its-local-content-requirements-to-encourage-investments-in-green-energy
- Published: 2024-10-07T09:22:16+07:00
- Author: ASEAN Briefing

**Indonesia’s MEMR 11/2024 relaxes local content requirements to attract international
funding for renewable energy under the Just Energy Transition Partnership’s (JETP)
$20 billion climate financing plan.**

## Relaxation of Local Content Requirements

The Indonesian government has eased local content requirements (LCR) for electricity
infrastructure development, as stipulated in the Ministry of Energy and Mineral 
Resources regulation 11 of 2024 (MEMR 11/2024). This change aims to attract concessional
funding from international development banks for renewable energy projects. By reducing
LCR, Indonesia seeks to foster the growth of its renewable energy sector, paving
the way for increased foreign investment and advanced technological integration 
within its energy infrastructure.

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## Introduction of the JETP Model

The Just Energy Transition Partnership (JETP) presents a novel framework for international
cooperation to address climate change. Combining public and private investments,
JETP facilitates climate financing for developing countries, enabling them to transition
from fossil fuels to renewable energy sources. Beyond promoting energy transition,
JETP aspires to advance the green economy and address the socioeconomic needs of
communities affected by such transitions. This inclusive approach ensures that both
environmental and human factors are considered in the shift to cleaner energy.

## Financial Mobilization for Renewable Energy

JETP aims to mobilize a significant US$20 billion over the next three to five years
to support Indonesia’s renewable energy adoption. This substantial financial commitment
underscores the importance of accelerating the country’s transition to sustainable
energy. An independent verification agency will oversee compliance with relevant
conditions, ensuring transparency and effectiveness. Electricity infrastructure 
projects funded by foreign loans must adhere to local content requirements unless
otherwise specified in the loan agreement, maintaining a balance between attracting
foreign investments and supporting local industries.

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**Read the original article :** [Indonesia Reduces Local Content Requirements to Boost Green Energy Investments ](https://www.aseanbriefing.com/news/indonesia-eases-local-content-rules-for-green-energy-investments/?rand=151001)