Released as Indonesia submitted its second nationally determined contribution (NDC), the report argues that Indonesia can leverage China’s growing appetite for renewable energy projects to advance not only its climate ambitions but also its industrial and economic goals.
Since coming to power a year ago, President Prabowo Subianto has set an ambitious 8 per cent economic growth target and has also committed to achieve 100 per cent renewable energy by 2035 – a goal that can only be met with a rapid scale-up in financing. Indonesia is an underdeveloped renewables market, with just 560 megawatts (MW) of total solar capacity installed, compared to 198 gigawatts (GW) added in China in the first five months of 2025.
Indonesia currently receives around US$900 million per year in energy financing from China. The study finds that redirecting this flow entirely into renewable energy over the 2025–2034 electricity supply plan (RUPTL) period could mobilise up to IDR144 trillion (US$9 billion).
This would be equivalent to funding roughly 80 Cirata-scale floating solar plants, projects large enough to collectively generate about 112,000 jobs and supply electricity to four million households. China’s PowerChina Huadong Engineering Corporation built the Cirata floating solar plant – the world’s largest – in West Java in 2023.
The real impact of Chinese investment would be even larger, noted Tata Mustasya, executive director of Sustain and board chairman of Trend Asia, on a webinar to discuss the findings.
“This number does not include indirect jobs that arise from the supply chain and related business activities, such as renting houses for workers and local food stalls,” said Mustasya.
Despite rising investment, the report warns that Indonesia still faces structural barriers preventing Chinese capital from generating benefits that bring local benefits.
“There is a big barrier for the localisation of China’s investment in Indonesia to make the investment really beneficial for Indonesia,” he said. “We need more incentives and regulations to provide clear and stable rules for green investment. We also need to invest in green skills to optimise the potential.”
Researchers argue that without a stronger local-content ecosystem – spanning engineering capabilities, component manufacturing and vocational training – Indonesia risks remaining dependent on imported technology and foreign contractors, missing opportunities to build homegrown industries.
The report also highlights Indonesia’s electric vehicle (EV) sector as a major opportunity for job creation. West Java is expected to attract IDR 83.2 trillion (US$5.2 billion) in EV investments over the next decade.
EV manufacturing plants in the province could employ at least 72,000 workers – equivalent to around 4 per cent of its open unemployment in 2024. Jobs created under projects such as the Karawang EV plant would offer the district’s minimum wage of IDR 5,599,593 (US$334) per month, more than double the average net salary of informal workers in local primary industries.
China’s shift from coal to clean energy accelerates
China, once the leading financier of overseas coal plants, has steadily shifted its overseas investments toward renewables. In 2024, Indonesia – the world’s biggest coal exporter – became the top recipient of Belt and Road Initiative investment in Southeast Asia; 56 per cent of all Chinese energy-sector financing in Indonesia that year went to renewable projects.
Mustasya said cooperation must now move beyond financing to knowledge exchange. “It is also important to have best-practice-sharing between China and Indonesia, and to have sharing between provinces in China and Indonesia as part of provincial partnerships.”
Such cooperation, he added, could help Indonesia more effectively integrate renewables, improve grid planning, boost local manufacturing capacity and accelerate skills development.
The study concludes that Indonesia – with abundant renewable resources, surging domestic energy demand and strong interest from China – has a rare opportunity to accelerate its energy transition. But unlocking this potential will require stronger industrial policies, investment clarity, and partnerships focused on long-term capacity building, Mustasya said.
He added that the report’s findings highlight the need to better align climate and economic planning in Indonesia.
“Our challenge now in Indonesia is how we can really connect Indonesia’s climate agenda for decarbonisation and climate mitigation with our economic agenda to create employment and to push industrialisation,” he noted.
The report comes a year after Prabowo’s state visit to Beijing, where Indonesia and China signed a series of cooperation agreements, several focused on clean-energy investment, electric vehicles and industrial development.
