Powering a Just Transition: How Strategic Investments are Transforming Indonesia’s Energy Future

April 22, 2025
Two technicians work on electrical equipment under solar panels, one using a multimeter.
ACCESS / UNDP
In Southwest Sumba, East Nusa Tenggara—one of Indonesia’s most underdeveloped regions—where electricity was once a luxury, a new chapter is beginning thanks to energy access. Elfrida, a local business leader, remembers the days when her business depended on the sun. As night fell, work came to a halt. Now, with solar power lighting up her community, she and hundreds of other women have the flexibility to extend their working hours, processing and marketing local products, and earning a steady income. For Elfrida, this shift has been life-changing: “Solar energy lets us work with more flexibility beyond daylight hours, boosting production and income. It’s strengthened our community.” 
Elfrida is one of the over 200 women who received targeted seed funding from UNDP’s catalytic investments from its core programming resources. With this, they were trained in clean energy solutions, digital literacy, business development, and  financial inclusion. As a result, she now leverages reliable energy and internet access to expand her business, which focuses on processing local crops like corn, banana, and ginger into value-added products which are then marketed in online platforms. This expansion has helped increase household incomes and strengthen community economic resilience putting women at the centre of energy transition. At the same time, these efforts have also enabled women to have the know-how to engage and benefit from the vast potential of the digital economy.
Women in hard hats and masks inspect solar panels, taking notes on a clipboard.
ACCESS / UNDP
This local success is a part of a far larger story. Indeed, Indonesia’s journey toward net-zero emissions by 2060 is not simply about replacing fossil fuels with renewables. It is about ensuring that this transition lifts people up, creating opportunities where there were few before, and improving the well-being of those who have historically been left behind in development efforts. A just energy transition—one that prioritizes equity, women’s inclusion, and economic resilience—can reshape entire communities, while making the future more prosperous, greener, and fairer. Through UNDP’s strategic, targeted core resources allocations, these examples illustrate that a just transition is possible and achievable. 
UNDP has been a trusted partner to the Government of Indonesia, supporting its efforts toward a sustainable and just energy transformation; this vision hinges on strategic, flexible investments that bridge high level policy engagement with grassroots action. For instance, core resources allowed UNDP to assume leadership of the Just Transition Working Group within the Just Energy Transition Partnership (JET-P) brokered by the G7. This enabled UNDP to define the principles of just energy transition at a time when the concept of “just” energy transition was only emerging. UNDP then spearheaded the formulation of the Just Transition Framework which is an integral part of the Comprehensive Investment and Policy Plan (CIPP)—Indonesia’s energy transition roadmap outlining needs for $97.1 billion in investments by 2030 and USD 580.3 billion by 2050 to phase out coal, scale renewables, and prioritize social equity.
Critically, with the above investment from the core resources, UNDP helped ensure that gender equality became a cornerstone of Indonesia’s national strategy on energy transition. The Just Transition White Paper, co-developed with the Government and launched at the sidelines of General Assembly in 2024, embedded gender-responsive policies into the national roadmap—a first for Indonesia. This meant initiatives like Southwest Sumba’s women-led enterprises  mentioned above did not remain an isolated example, but were rather part of a paradigm shift that placed women at the centre of energy transition agenda, closing the loop between local action and systemic change. 
Two technicians in hard hats and gloves work on a solar panel installation.
ACCESS / UNDP
Initiatives funded through non-core resources have also been instrumental as they generated synergies and helped scale the impact of core-funded initiative often at more operational levels. Often times, non-core funded initiatives would make less sense without the strategic core investments, while at the same time core investments would have less impact without the non-core.
For instance, one of UNDP’s non-core funded projects was successful in increasing access to renewable energy, providing electricity to over 14,000 people in rural communities, and focused on reducing inequality through availability and productive use of clean energy. The results were tangible: in remote areas, women—who previously had limited opportunities to work or study after dark—are now able to extend their working hours and engage in income-generating activities thanks to clean, reliable energy.
A light-colored building surrounded by palm trees and green grass under a blue sky.
ACCESS / UNDP
Energy transition is at the same time an important component of Indonesia’s carbon pricing mechanisms, another priority of the Government. UNDP’s technical assistance was pivotal in launching the mandatory emissions cap for coal-fired power plants, developing a carbon tax implementation roadmap, and establishing a carbon registry system that facilitates information flow between projects and buyers. These different pieces of the puzzle, calibrated by UNDP have laid the foundation for Indonesia’s domestic carbon trade which was launched in 2023. 
Likewise, innovation in the financing is key to sustaining a just and inclusive energy transition. UNDP has helped Indonesia develop the green sukuk, a financing tool that directs investments into renewable energy and climate projects. The green sukuk, the first sovereign issuance of its kind, follows Islamic finance principles and attracts investors focused on sustainability. This initiative provides the financial resources that were channelled to programmes that reduced greenhouse gas emissions and expanded clean energy access.
As these successes ripple outward, the national stage is also changing. In November 2024, UNDP facilitated an important dialogue where policymakers, development practitioners, and women’s groups came together to discuss how to scale women’s engagement in the energy transition nationwide. The outcomes of this dialogue are elevating the discourse and shaping the future of inclusive energy policies in Indonesia. For the first time, gender considerations are embedded into Indonesia’s energy transition, ensuring that women, who have been marginalized in previous energy transitions, are not left behind, and making a real dent in an otherwise traditionally male-dominated sector. 
These achievements in energy policy, carbon trade and green finance did not happen in isolation but are the culmination of strategic investments of core resources, complemented by non-core, generating synergies for greater results. UNDP has facilitated the coordination needed to drive technical progress, policy advocacy, and innovative financing, creating tangible benefits for communities, connecting high-level policy with real-world impact. Together, they have contributed to overall development priorities in Indonesia, as well as specifically to the country’s Nationally Determined Contributions (NDCs) and Net-Zero ambitions. 
Indonesia’s just energy transition goes beyond cleaner energy—it’s about building a resilient economy where communities thrive. Every solar panel installed, every woman empowered, and every new business launched brings a lasting change, edging Indonesia closer to a future where clean energy fuels equitable economic growth for all.