JAKARTA, RAKYAT NEWS – The Asian Development Bank (ADB) has approved a policy-based loan of $500 million (approximately IDR 7.5 trillion) to assist Indonesia in accelerating its energy transition. This funding is part of a broader initiative aimed at fostering an affordable and sustainable energy transition.

According to Jiro Tominaga, ADB’s Director for Indonesia, the loan will support Indonesia’s national contributions to climate goals and its target for net-zero emissions in electricity generation by 2050.

“Indonesia stands at a critical juncture in its energy transition journey,” Tominaga stated in a press release.

The program aims to develop robust policies and regulations to facilitate a clean energy transition, enhance governance in the sector, and ensure an equitable and inclusive shift. Despite significant growth in electricity generation capacity, Indonesia remains heavily reliant on fossil fuels such as coal, gas, and diesel.

A key component of the initiative includes developing a Comprehensive Investment and Policy Plan (CIPP), supported by the Just Energy Transition Partnership (JETP), which will identify investment needs and opportunities for a fair energy transition.

Regulatory enhancements will aim to scale renewable energy capacities and strengthen governance within state-owned enterprises in the energy sector.

This program is a collaborative effort involving ADB and its co-financing partners, including the French Development Agency (AFD) and the German Development Bank (KfW).

It will also support the government’s early-stage regulatory development for energy transition, ensuring a comprehensive approach through the Energy Transition Mechanism (ETM).

ADB is committed to fostering a prosperous, inclusive, resilient, and sustainable Asia and Pacific, continuing its efforts to eradicate extreme poverty. (Uki Ruknuddin)