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ADB supports Indonesia's clean energy transition programme with 470 million USD loan

The programme is expected to prevent up to 2.5 million tonnes of carbon dioxide (CO₂) emissions each year and support the vision of the Association of Southeast Asian Nations (ASEAN) Power Grid by creating a grid that allows large-scale integration of renewable energy and functions as vital national infrastructure for ASEAN countries.

The move is expected to prevent up to 2.5 million tonnes of CO₂ emissions each year. (Photo: ADB)
The move is expected to prevent up to 2.5 million tonnes of CO₂ emissions each year. (Photo: ADB)

Jakarta (VNA) – The Asian Development Bank (ADB) has approved a 470 million USD results-based loan to PT Perusahaan Listrik Negara (PLN), Indonesia's state electricity corporation, to fast-track the country’s clean energy transition programme.

This initiative aims to support the country's shift towards renewable energy and help achieve its sustainable and low-carbon economic growth objectives.

The Accelerating Indonesia's Clean Energy Transition Programme - Phase 1 will enable the development of solar photovoltaic (PV) and wind power projects, enhance power grid infrastructure across Java-Madura-Bali, Sumatra, and Sulawesi, and strengthen PLN's institutional capacity to manage the ongoing transition.

The programme is expected to prevent up to 2.5 million tonnes of carbon dioxide (CO₂) emissions each year and support the vision of the Association of Southeast Asian Nations (ASEAN) Power Grid by creating a grid that allows large-scale integration of renewable energy and functions as vital national infrastructure for ASEAN countries.

The programme serves as a central component of ADB's country partnership strategy for Indonesia, from 2025 to 2029, which prioritises the clean energy transition to improve resilience and promote sustainability.

The programme will be financed with 470 million USD in loans from ADB’s ordinary capital resources, supplemented by 30 million USD from ADB-administered funds.

These additional funds include resources from the ASEAN Infrastructure Fund, as well as contributions from the EU and the UK through the ASEAN Catalytic Green Finance Facility.

The programme is expected to mobilise more than 1 bililion USD in private investment to develop 1,800MW of utility-scale solar and wind power projects.

Indonesia plans to generate 41% of its electricity from renewable sources by 2040, a significant rise from 15% in 2024./.

VNA
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