ADB approves $500 million loan to accelerate Indonesia’s energy transition
The Asian Development Bank (ADB) has approved a $500 million policy-based loan to support Indonesia’s shift towards sustainable energy. This loan, part of the Affordable and Sustainable Energy Transition Program, aligns with Indonesia’s goal to meet its enhanced nationally determined contribution and reach net zero power emissions by 2050.
This first tranche of a two-part program aims to facilitate the country’s transition from fossil fuels to cleaner energy by developing a regulatory framework, improving sector governance, and ensuring a fair and inclusive energy transition. A key aspect of the program is the development of a comprehensive investment and policy plan (CIPP) through the Indonesia Just Energy Transition Partnership, outlining necessary investments to support this shift.
ADB’s efforts are supported by co-financing from Agence Française de Développement and German Development Cooperation through KfW, further strengthening Indonesia’s leadership in the energy transition. ADB continues to assist with regulatory development, infrastructure financing, and technical assistance projects.
ADB Indonesia country director Jiro Tominaga emphasized the importance of this loan in addressing the complex challenges Indonesia faces in accelerating its move towards clean energy. In addition, ADB recently finalized a long-term loan agreement with Engie to develop a 400 MW solar facility in India.