The Asian Development Bank (ADB) signed a $10 million financing contract with PT TBS Energi Utama Tbk known as TBS in ensuring sustainable transportation in Indonesia is promoted. Funding to further expand electric motorcycles and facilitate the construction of battery-swapping stations will also alleviate greenhouse gas emissions.
The financing comprises ADB loan of $5 million and the Australian Climate Finance Partnership (ACFP) of another $5 million. TBS will commit these funds to an investment in PT Energi Kreasi Bersama, an electric mobility arm. The financing will assist in procuring e-motorcycles and setting up a robust network of BSS. This project will therefore reduce annual greenhouse gas emissions by at least 123,000 tons.
DBS Indonesia is also partnering as a parallel lender in the endeavour, which further strengthens the funding for the project.
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Indonesia is the largest automotive market in Southeast Asia, and, road transport contributes to several environmental issues as its contribution to greenhouse gas is high. As of 2022, about 148 million two-wheelers were on the road in Indonesia, but only about 26,000 were electric.
Suzanne Gaboury, Director General for Private Sector Operations at ADB, said, “Indonesia is rapidly urbanizing and seeing a surge in private vehicle ownership, particularly motorcycles. By working with TBS in this project, ADB aims to increase the reliability of e-motorcycles and expand sustainable transport options for Indonesians.”
She added, “As ADBâs first private sector financing for the countryâs e-vehicle industry, the project can demonstrate the commercial viability of e-motorcycles and encourage further investments to promote their use.â
TBS, a leading Indonesian energy company, and its subsidiary Electrum are tackling challenges to expand electric vehicle adoption. These barriers range from high initial costs associated with e-motorcycles and issues related to battery range. Electrum aims to achieve an electric transportation future that is affordable by providing cheaper yet high-quality e-motorcycles and creating an expansive battery swapping network.
A Partnership for Climate Action
The Australian Department of Foreign Affairs and Trade funds the Australian Climate Finance Partnership and invests up to A$140 million in climate projects in Southeast Asia and the Pacific, prioritizing gender equality and economic opportunities for women.