World Bank approves $500 million to modernize Indonesia’s grid

The World Bank has approved the Indonesia Electricity Network Transformation (I-ENET) Program, a $500 million operation to upgrade electricity distribution in Java, Madura, and Bali. The initiative is designed to improve the integration of renewable energy and accelerate the digitalisation of Indonesia’s grid.

Indonesia’s rising electricity demand has so far been met mainly through fossil fuels. With the country targeting high-income status by 2045 and net-zero emissions by 2060, the government aims to strengthen electricity systems to ensure reliability and sustainability.

The program will be carried out under PT PLN’s National Electricity Business Plan (RUPTL) between 2025 and 2032. Financing includes $500 million from the World Bank, $491 million from PLN, and an estimated $342 million in private investment, mainly in rooftop solar and charging infrastructure for electric vehicles.

PLN CEO Darmawan Prasodjo said the program will reinforce distribution networks and support Indonesia’s net-zero target. According to the World Bank, the project is expected to provide new or improved electricity services to about 20 million people and enable 300 megawatts of rooftop solar capacity to be connected to the grid.

The program will use the World Bank’s step-up loan product, which lowers borrowing costs during implementation and offers refinancing options after completion. This is the second project in Indonesia to adopt the financing tool, following approval of the Sustainable Least Cost Electrification-2 Project in June 2025.