When Taiwan’s Cathay Life Insurance quietly agreed in December last year to acquire a 50 percent stake in Orsted’s 583MW Greater Changhua 4 offshore wind farm — a deal worth US$1.64 billion — it signaled more than a transfer of capital, showing a shift toward Taiwanese financial institutions owning climate infrastructure, not merely exporting green technology.
Meanwhile, Indonesia is behind on its energy transition. By the end of 2023, renewables — solar, biomass, hydro and wind — made up just 13 percent of on?grid electricity generation, despite a 23 percent target by this year. With only 3 gigawatts (GW) of renewables added from 2018 to 2023, the country appears unlikely to meet its goal. Taiwan is also falling short. Its Climate Change Response Act (氣候變遷因應法) requires net zero emissions by 2050, yet as of last year, renewables accounted for only 16.8 percent of electricity generation, while 2.5GW to 2.7GW of offshore wind has been commissioned, the target for this year — 5.7GW offshore and 20GW solar — are in jeopardy due to permitting and supply delays.
However, these shortfalls present an opportunity. Indonesia’s vast reservoir surfaces have nearly 4GW of untapped hydro-photovoltaic potential. The 192MW Cirata Reservoir floating solar array, inaugurated in November 2023, already powers 50,000 homes and cuts more than 200,000 tonnes of carbon dioxide annually. The potential is clear — what is missing is scale.
Taiwan, for its part, has production capacity for offshore wind foundations, turbines and floating solar components, as well as experienced project financiers. However, it lacks land and low-cost resources. The synergy is clear: Taiwan’s capital and technology, Indonesia’s geography and renewable ambition.
The first pillar of an Indonesia-Taiwan energy compact could be floating solar megawatt corridors. A shared 500MW pilot — starting with the Cirata Resevoir in West Java and expanding to other sites — would pair Indonesia’s water-based solar potential with Taiwanese engineering and financing.
The second pillar is offshore wind supply-chain cooperation. Taiwanese firms could establish assembly and component yards in Batam or Sulawesi, serving Taiwan’s Changhua wind projects and Indonesia’s emerging coastal wind zones. Such cross-border manufacturing would reduce ASEAN logistics costs and streamline subsea cable deployment.
Indonesia is a key target of the G7-backed Just Energy Transition Partnership (JETP), which aims to mobilize US$20 billion in public and private capital to reach a 44 percent renewable electricity share by 2030. Yet by this year, only US$1.1 billion had been committed to 54 projects, including just US$233 million in grants.
Taiwanese insurers and pension funds — buoyed by Cathay Life’s high-profile offshore wind stake — could help bridge Indonesia’s clean-energy financing gap. By offering equity or credit for floating PV and wind projects through blended-finance models tied to JETP guarantees, they could mobilize stalled investments. A Jakarta-based clean-energy fund backed by Taipei investors could unlock stalled projects and deliver solid returns for Taiwan’s asset managers.
The third pillar is knowledge exchange. Taiwan’s Green Energy Science City in Tainan could host Indonesian engineers for training in mooring systems, microgrids and offshore structural resilience. In return, Indonesian universities could pilot solar-hydro storage, biomass cogeneration, and grid-flexibility solutions in Java and Sulawesi. This lab-to-lab network would strengthen technical capacity and foster institutional trust.
To coordinate these efforts, Jakarta and Taipei should form a Green Energy Task Force with a mandate to develop three pilot proposals: a reservoir-linked solar-storage island, a modular wind-equipment yard and an industrial solar-storage hub. Embedding these projects in Indonesia’s Electricity Supply Business Plan and Taiwan’s Grid-Development Roadmap would ensure political and commercial commitment.
Skeptics would cite Indonesia’s permitting delays and Taiwan’s regulatory inconsistency. These barriers are real, but call for reform, not retreat. Indonesia must relax barriers to investment. Taiwan’s developers and insurers must align with international environmental, social and governance standards, and engage in labor consultation and community hiring.
The payoff is clear: Indonesia accelerates decarbonization and grid stability; Taiwan expands its green industrial footprint in Southeast Asia and integrates into ASEAN value chains.
This clean-energy compact is not rhetorical — it is pragmatic. With complementary strengths and shared climate deadlines, neither side can scale fast enough alone. Together, they can ride the climate-finance wave with economic logic on both sides.
Muhammad Zulfikar Rakhmat is director of the China-Indonesia Desk at the Center of Economic and Law Studies in Jakarta.
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