The Asian Development Bank (ADB) has approved a $500 million policy-based loan to aid Indonesia in accelerating its energy transition. This loan, under the Affordable and Sustainable Energy Transition Program, will support various policy measures aimed at achieving the country’s enhanced nationally determined contribution (NDC) and net-zero power emission targets by 2050.
The program, which is the first of two subprograms, focuses on establishing a robust policy and regulatory framework for clean energy transition, strengthening sector governance and financial sustainability, and ensuring a just and inclusive transition. Key measures include the development of a Comprehensive Investment and Policy Plan (CIPP), supported by the Indonesia Just Energy Transition Partnership, and regulatory improvements for scaling up renewable energy capacity.
“Indonesia is at a critical juncture in its energy transition journey,” said ADB Country Director for Indonesia Jiro Tominaga.
“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.”
The ADB’s loan is a joint effort with cofinancing partners, Agence Française de Développement (AFD) and German Development Cooperation through KfW, to support the Indonesian government’s leadership in energy transition. The program builds on ADB’s previous support through the Energy Transition Mechanism, sovereign and nonsovereign infrastructure financing, and technical assistance projects.
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