JAKARTA, Nov. 24 (Reuters) – The Asian Development Bank (AfDB) on Tuesday approved a $ 600 million loan to Indonesian utility Perusahaan Listrikk Negara (PLN) to expand access to electricity and promote renewable energy .
The loan is part of the second phase of an electricity grid development program covering the outlying regions of Kalimantan, Moluccas and Papua in the east of the country, which began in 2017.
“The program will six-fold the supply of renewable-powered PLN electricity to isolated communities and reduce domestic consumption of kerosene and wood, which is expected to generate significant environmental and social benefits,” said Diana Connett, specialist energy to ADB.
The Indonesian government aims for 23% of energy to come from renewable sources by 2025, up from around 9% in July, but progress on renewable projects has been slow.
The country has a potential capacity of more than 400 gigawatts for sources like hydropower, solar and geothermal energy, but only about 2.5% has been used, according to government data.
He hopes to simplify the pricing of electricity from renewable energies to encourage more investment in the sector. (Reporting by Tabita Diela; Editing by Martin Petty)