The Asian Development Bank (ADB) has approved a $500 million policy-based loan to help Indonesia accelerate its energy transition. Under the Affordable and Sustainable Energy Transition Program, this funding will support various policy measures aimed at achieving the country’s enhanced nationally determined contribution (NDC) and net-zero power emissions by 2050.
This program is the first of two subprograms and focuses on establishing a robust policy and regulatory framework for clean energy, strengthening sector governance and financial sustainability, and ensuring an equitable transition. Key initiatives include developing a Comprehensive Investment and Policy Plan (CIPP) with the support of the Indonesia Just Energy Transition Partnership, as well as regulatory improvements to scale up renewable energy capacity.
“Indonesia is at a critical juncture in its energy transition journey,” stated ADB Country Director for Indonesia Jiro Tominaga. “This policy-based loan program facilitates the collaborative development of policies needed to tackle the sector’s complex challenges and accelerate the shift toward sustainable and clean energy.”
The ADB's loan is part of a joint effort with cofinancing partners, Agence Française de Développement (AFD) and German Development Cooperation through KfW, to support the Indonesian government’s energy transition leadership. The program builds on ADB's previous initiatives, including the Energy Transition Mechanism, sovereign and non-sovereign infrastructure financing, and technical assistance projects.
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