What ETMs can and can’t do for coal retirements

(TXF, London, 30 November 2022) The evolving science of coal plant retirement financing has had a busy couple of weeks with the Asia Development Bank signing a 14 November memorandum of understanding re potential early retirement of the Cirebon Electric Power for unit 1 of the 1,660MW Cirebon coal-fired plant, using the ADB’s Energy Transition Mechanism (ETM). The day after, on the sidelines of the same G20 summit where the Cirebon MOU was signed, the US, Indonesia and a raft of other developed countries launched the Just Energy Transition Partnership (JETP), a $20 billion combination of grants, concessional loans, commercial loans, ECA guarantees, and private investment. The programme will cover a big expansion in renewables, and the retirement of coal capacity whose emissions cannot be rebated. Aside from the summit-friendly but content-light announcements, there was further progress on the first coal retirement financing in Asia for a 244MW Philippino coal plant.