ADB Approves $500 Million Loan to Accelerate Indonesia's Energy Transition

The Asian Development Bank (ADB) has greenlit a $500 million policy-based loan to expedite Indonesia's energy transition. This funding is part of the Affordable and Sustainable Energy Transition Program.  

It will facilitate various policy initiatives to help the country meet its enhanced nationally determined contribution (NDC) and achieve net-zero power emissions by 2050.  

This loan represents the first of two subprograms within this effort. 

“Indonesia is at a critical juncture in its energy transition journey,” said ADB Country Director for Indonesia Jiro Tominaga.

He added, “This policy-based loan program supports Indonesia’s foundational and collaborative policy development to identify and address the sector’s complex challenges to accelerate its shift towards sustainable and clean energy.” 

ADB Approves Road Map to Tackle Climate Change and Drive Private Sector Development

The program aims to create a strong policy and regulatory framework to facilitate a clean energy transition, enhance governance within the sector, and ensure that the transition is fair and inclusive.  

A significant component of this initiative is the development of a Comprehensive Investment and Policy Plan (CIPP), backed by the Indonesia Just Energy Transition Partnership, which outlines the necessary investments and opportunities for achieving a just energy transition.  

Additional key actions include regulatory enhancements to expand renewable energy capacity and initiatives designed to bolster the governance and capacity of state-owned energy enterprises, particularly in promoting gender equality. 

This program represents a collaborative initiative involving the ADB, along with cofinancing partners Agence Française de Développement (AFD) and German Development Cooperation via KfW, to bolster the government’s leadership in its energy transition efforts. 

Fourth Partner Energy to expand with $275 million investment from IFC, ADB, and DEG

ADB plays a vital role by supporting the government’s early regulatory development phase concerning energy transition.  

This support is based on extensive assistance through the Energy Transition Mechanism, sovereign and non-sovereign infrastructure financing, and a diverse array of technical assistance projects.