The Asian Development Bank (ADB) has approved a $470 million results-based loan to Indonesia’s state electricity company, PLN, to accelerate the country’s transition to clean and renewable energy. The program, known as the Accelerating Indonesia’s Clean Energy Transition Program—Phase 1, aims to support Indonesia’s shift toward low-carbon growth and help the nation strengthen its long-term energy security.
The initiative will drive the development of large-scale solar and wind power projects while upgrading power grid infrastructure across Java-Madura-Bali, Sumatra, and Sulawesi. It will also enhance PLN’s institutional capacity to manage the clean energy transition. By improving renewable energy integration and grid reliability, the program is expected to reduce up to 2.5 million metric tons of carbon emissions each year and support regional power connectivity through the ASEAN Power Grid vision.
ADB noted that the program aligns with Indonesia’s broader goal of achieving high-income status by 2045 through economic, social, and governance reforms. It is a central component of ADB’s Country Partnership Strategy for 2025–2029, which places clean energy and sustainability at the core of development priorities.
The program will run from 2026 to 2031 and includes $470 million in financing from ADB’s ordinary capital resources, supplemented by $30 million from ADB-administered funds such as the ASEAN Infrastructure Fund and contributions from the European Union and the United Kingdom. It also features a $3 million grant from the Global Energy Alliance for People and Planet. The initiative is expected to attract over $1 billion in private investment to help develop 1,800 megawatts of utility-scale solar and wind projects.
Indonesia plans to increase the share of renewable energy in its electricity mix to 41% by 2040, significantly up from 15% in 2024. The program directly supports the country’s Electricity Supply Business Plan, which targets 69.5 gigawatts of new generation capacity, most of it from renewable sources. It will also promote gender equality within PLN by encouraging greater recruitment of women in roles central to renewable energy development and by strengthening its workforce through training, internships, and education. Environmental and social safeguards will guide implementation to ensure responsible and sustainable development.
