Asia Development Bank (ADB) provides USD 1.1 billion loans to the energy sector in Indonesia consisting of USD 500 million for Sustainable and Inclusive Energy Program (SIEP)-Subprogram 2 and USD 600 million for PLN.
Winfried Wicklein, Chief Representative of ADB for Indonesia, said both loans will improve the policy climate that enables to increase public and private investment in energy sector, and support and build electricity distribution networks in eastern Indonesia.
“Increasing access to affordable and sustainable energy sources is a precondition for governments to meet their economic growth aspirations,” said Wicklein.
Indonesia’s energy sector encounters various problems, from primary energy supply to electricity distribution. This causes around 23 million Indonesians lacking the electricity access.
Indonesia lags behind from its neighbors in Southeast Asia in developing renewable energy resources, such as solar, wind, and biomass. This causes the electricity industry to rely on coal, which accounts for more than five percent of energy generation in 2016.
Wicklein said the policy of SIEP would further rationalize rates, encourage private electricity and gas investments, and support the increasing scale of renewable energy and energy efficiency measures. Meanwhile, USD 600 million loans for PLN will be focused on electricity distribution in eight provinces in Nusa Tenggara and Sulawesi. This is expected to push business activities that depend on stable energy supplies, such as agriculture, fisheries, small and medium enterprises, and tourism. (*)