The Asian Development Bank (ADB) approved at the end of November a loan worth $500 million to support Indonesia’s energy sector reforms aimed to boost fiscal sustainability and governance, expand private sector investments in clean and renewable energy, and promote green recovery from pandemic.
Along with the Indonesian government’s joint statement for the Just Energy Transition Partnership and Energy Transition Mechanism announced at the G20 meetings in Bali in November 2022, the program also supports the government’s commitment to develop strategies for the early phase out of coal-fired power plants in the country and clean energy transition. These goals will be the focus of ADB’s support to the Indonesian energy sector going forward, the bank said.
ADB will also administer a loan of $15 million for the third subprogram of the Sustainable and Inclusive Energy Program funded by the Association of Southeast Asian Nations (ASEAN) Infrastructure Fund through its ASEAN Catalytic Green Finance Facility (ACGF). In addition, the project will include an equivalent of $292 million in co-financing from the German Development Cooperation, through KfW, and $60 million from the Economic Development Cooperation Fund.
“The program supports the government in implementing a policy framework to achieve financial sustainability for the energy sector and improved energy access, along with a commitment to a clean energy transition,” said ADB Senior Energy Specialist Yuki Inoue.
“The reforms will also pave the way for taking forward the broader energy transition agenda announced by Indonesia and its international partners at the recently concluded Group of 20 meetings,” Inoue added.