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

The Asian Development Bank has approved a $500 million loan to aid Indonesia's transition to cleaner energy. The program aims to reduce coal use and establish a robust policy framework for clean energy. Co-financing partners include France's AFD and Germany's KfW.

The Asian Development Bank (ADB) has approved a $500 million loan to support Indonesia's efforts in transitioning to cleaner energy sources. The announcement was made on Friday.

Indonesia, rich in natural resources, is targeting net-zero carbon emissions by 2060 and is currently working to reduce its coal dependency. This endeavor is backed by financial support from the G7's Just Energy Transition Partnership (JETP), although fund disbursement has been slow.

The ADB mentioned that the program is aimed at establishing a strong policy and regulatory framework for the clean energy transition, enhancing sector governance, and ensuring financial sustainability. Jiro Tominaga, ADB's country director for Indonesia, highlighted that the loan will assist Jakarta in accelerating its shift towards sustainable and clean energy. The program also includes development of a JETP-supported investment and policy plan, and strategies for scaling up renewable energy capacity. Co-financing partners for the initiative include France's Agence Française de Développement (AFD) and German state lender KfW.

(With inputs from agencies.)