Indonesia gets $600m energy loan approval

24 Nov 20

The Asian Development Bank has approved a $600m loan to Indonesia for the expansion of electricity access in nine provinces.


Jakarta, Indonesia

Jakarta, Indonesia

The funds will go to the State Electricity Corporation (PLN), Indonesia’s state-owned power company, alongside two $3m grants from the Japan Fund for Poverty Reduction and the Asia Clean Energy Fund.

The loan will help the energy provider with the second phase of the Sustainable Energy Access in Eastern Indonesia – Electricity Grid Development Program, to expand energy and improve services to three islands.

Toru Kubo, Southeast Asia energy director at the ADB, said: “The program will boost sustainable, equitable, and reliable access to electricity among the communities in remote eastern Indonesia, including through the use of solar and other renewable sources.

“The program will also support eastern Indonesia’s economic recovery from the pandemic and contribute to equitable and resilient growth.”

The facility is a results-based loan, with a guarantee from the Indonesian government and help support efforts to install medium and low-voltage power distribution infrastructure.

It will also help PLN staff manage assets more effectively and safely dispose of waste equipment, as well as improve procurement and payment systems.

The Indonesian government has pledged to extend access to power outside of the region of Java and into more rural areas, where more than half of residents have limited or no access to electricity. 

The two grants will help renewable energy plants apply technologies to improve system design and maintenance, as well as support measures to install power connections for poor households.

The first phase of the program began in 2017 and covered eight provinces on the islands of Sulawesi and Nusa Tenggara and finished in 2019.

The programme was deemed a success and increased the number of new customers by 1.5 million –around 150,000 more than its target.  

The second phase of the program aims to provide electricity to 1.55 million new customers by 2024.

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