ADB Disburses IDR 7.8 Trillion Loans For PLN

ADB (Photo: Antara)

JAKARTA Asian Development Bank (ADB) has approved a proceeds-based loan of US$470 million or equivalent to Rp7.8 trillion to PT Perusahaan Listrik Negara (PLN) to accelerate Indonesia's transition to renewable energy and advance its target for sustainable growth and low-carbon economic growth.

The Phase 1 Indonesia Clean Energy Transition Acceleration Program (Accelerating Indonesia's Clean Energy Transition Program) will help develop solar and wind photovoltaic power generation projects, to strengthen electricity network infrastructure in Java-Madura-Bali, Sumatra, and Sulawesi, as well as increase PLN's institutional capacity in managing energy transitions.

The program is expected to avoid CO2 emissions of up to 2.5 million metric tons each year, as well as contribute to the vision of the ASEAN Electricity Network by developing a strong power grid so as to be able to integrate renewable energy effectively on a large scale and act as the foundation of the national electricity infrastructure for ASEAN countries.

Deputy Director of ADB for Indonesia, Renadi Budiman, said that this program marks an important step in Indonesia's journey to a cleaner and more sustainable energy future.

"Through support for PLN's renewable energy targets and strengthening network infrastructure, we help Indonesia prepare the foundation for energy security and long-term regional connectivity," he said in his statement, Wednesday, November 19.

He added that this program is also in line with Indonesia's development goals to achieve the status of high-income countries in 2045 through economic, social, and governance transformations.

According to him, this program is an important part of the 2025'2029 State Partnership Strategy (Country Partnership) for Indonesia from ADB, which prioritizes a clean energy transition to increase resilience and sustainability.

Meanwhile, the program will be implemented from 2026 to 2031 consisting of financing 470 million US dollars from ADB's ordinary capital resources (ordinary capital resources) and 30 million US dollars from ADB-run funds, including the ASEAN Infrastructure Fund (ASEAN Infrastructure Fund), and contributions from the European Union and the UK under the ASEAN Green Financing Catalytic Facility (ASEAN Catalytic Green Finance Facility).

In addition, the program also includes a $3 million grant from the Energy Access and Transition Trust Fund (Energy Access and Transition Fund) compiled by the Global Energy Alliance for People and Planet (GEAPP).

He added that this program is expected to mobilize private investment of more than US$1 billion to meet the financing of solar power and wind power plants on a scale of utilities with a total capacity of 1,800 megawatts.

Indonesia itself targets 41 percent of the electricity mix to come from renewable energy in 2040, an increase from around 15 percent in 2024. This program also supports the implementation of the 2025-2034 Electric Power Supply Business Plan (RUPTL) which stipulates an additional power plant capacity of 69.5 gigawatts, with 76 percent of which comes from renewable energy sources.

In addition, Renadi said the program also promoted gender equality by supporting PLN to recruit more women in various roles and departments relevant to renewable energy development.

"This program also aims to build a workforce for the PLN energy transition through formal learning, internship, and education programs. The implementation will be guided by environmental and social protection, supported by spatial screening tools and climate vulnerability assessments," he explained.