The Asian Development Bank (ADB) has approved a $470m results-based loan to PT Perusahaan Listrik Negara (PLN), Indonesia's state electricity corporation, to fast-track the country’s clean energy transition programme.
This initiative aims to support the country's shift towards renewable energy and help achieve its sustainable and low-carbon economic growth objectives.
The Accelerating Indonesia's Clean Energy Transition Program - Phase 1 will enable the development of solar photovoltaic (PV) and wind power projects, enhance power grid infrastructure across Java-Madura-Bali, Sumatra, and Sulawesi, and strengthen PLN's institutional capacity to manage the ongoing transition.
The programme is expected to prevent up to 2.5 million tonnes of carbon dioxide (CO₂) emissions each year and support the vision of the Association of Southeast Asian Nations (ASEAN) Power Grid by creating a grid that allows large-scale integration of renewable energy and functions as vital national infrastructure for ASEAN countries.
ADB Indonesia deputy country director Renadi Budiman said: "This programme marks a pivotal step in Indonesia's journey toward a cleaner, more sustainable energy future.
"By supporting PLN’s renewable energy targets and strengthening the grid infrastructure, we are helping Indonesia lay the foundation for long-term energy security and regional connectivity."
The programme serves as a central component of ADB's country partnership strategy for Indonesia, from 2025 to 2029, which prioritises the clean energy transition to improve resilience and promote sustainability.
The programme will be financed with $470m in loans from ADB’s ordinary capital resources, supplemented by $30m from ADB-administered funds.
These additional funds include resources from the ASEAN Infrastructure Fund, as well as contributions from the EU and the UK through the ASEAN Catalytic Green Finance Facility.
The programme is expected to mobilise more than $1bn in private investment to develop 1,800MW of utility-scale solar and wind power projects.
Indonesia plans to generate 41% of its electricity from renewable sources by 2040, a significant rise from 15% in 2024.
The initiative directly supports Indonesia's Electricity Supply Business Plan 2025-2034, which seeks to add 69.5GW of new generation capacity, with renewables expected to account for 76% of this growth.
Project implementation will be governed by environmental and social safeguards, with support from spatial screening tools and climate vulnerability assessments.
Last year in September, ADB approved a $500m policy-based loan to expedite Indonesia’s energy transition.
