THE Asian Development Bank (ADB) said on Friday (Sep 20) that it has approved a US$500 million policy-based loan to Indonesia to fund a programme designed to help its energy transition efforts.
Resource-rich Indonesia, which is aiming for net-zero carbon emissions by 2060, has been trying to reduce the use of coal with financial support from the G7’s Just Energy Transition Partnership (JETP).
Highlighting Indonesia’s reliance on coal, the ADB said the programme “focuses on establishing a robust policy and regulatory framework for clean energy transition, strengthening sector governance and financial sustainability”.
“Indonesia is at a critical juncture in its energy transition journey,” said Jiro Tominaga, ADB’s country director for Indonesia, adding the loan supported Jakarta’s efforts “to accelerate its shift towards sustainable and clean energy”.
The ADB did not immediately respond to a request for comment when asked about specifics on how the funds would be spent.
The programme includes developing a JETP-supported investment and policy plan, and improvements for scaling up renewable energy capacity, said ADB, whose co-financing partners for the programme include France’s development agency, Agence Française de Développement (AFD), and German state lender KfW.
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Funds worth US$20 billion have been pledged under a JETP plan for Indonesia to cap emissions in the power sector at 290 tonnes of carbon in 2030, but disbursement of funds has been slow.
Asked about JETP’s slow implementation, Britain’s development minister Anneliese Dodds said this week that JETP is a long-term partnership that requires big changes around infrastructure.
“This is not going to happen overnight,” she said. “The UK is really working to renew that approach so that together we can be focused on green growth and economic development.”
Dodds added Indonesia has an opportunity to be a carbon sink for the region and that Britain intends to work with other JETP partners to accelerate efforts such as poverty alleviation and deforestation. REUTERS
