The Asian Development Bank (ADB) has announced a private sector package worth $40 million for the purpose of investing in Indonesia’s very first utility-scale solar PV projects on a project-finance basis.
As per the announcement, as many as 42 MW of Indonesian solar PV projects would be financed by ADB.
The loan package is part of a two-phased portfolio financing amounting up-to approximately $160 million for new renewable energy investments in Indonesia.
The funds would be used to finance the following:
- A 21 MW solar PV power project in Likupang, North Sulawesi.
2.Three 7 MW solar PV power projects in Pringgabaya and Sengkol.
The solar energy accumulated through these PV projects will go on to supply energy to Perusahaan Listrik Negara (PLN), Indonesia’s national power utility.
Further, a couple of trust funds namely the Leading Asia’s Private Infrastructure Fund (LEAP), and the Canadian Climate Fund for the Private Sector in Asia II (CFPS II) that are administered by ADB would also be contributing to the $40 million loan.
This $40 million financing marks the second phase of ADB’s investment in renewable energy assets being developed by Vena Energy (Formerly Equis Energy) in Indonesia. As the first phase, was signed back in December 2017, which comprises of a 72 MW wind power plant in Jeneponto, South Sulawesi. Nearly $120.8 million was financed by ADB to PT Energi Bayu Jeneponto, a subsidiary of Vena Energy.
Vena Energy’s chief executive officer Nitin Apte commented on this announcement in a press release, which reads, “Indonesia has made a strong move towards renewable energy, promising to use the nation’s significant solar and wind energy resources to grow renewables to 23 percent of Indonesia’s overall energy mix by 2025.”
By the year 2050, Indonesia has set a renewable energy target of 31 percent of the overall energy mix.
Indonesia has tremendous potential of producing more than 700 GW of renewable energy, that includes 532.6 GW of solar power, as per International Renewable Energy Agency (IRENA).
Notably, this is not the first occasion when ADB has financed projects in Indonesia’s energy sector as back in September 2017, two loans amounting up to $1.1 billion for the purpose of strengthening and diversifying Indonesia’s energy sector was sanctioned by the board of the ADB.
Also back in December 2017, it was reported by Mercom that Indonesia was all set to be home for a 200 MW floating solar PV project that has claimed to become the world’s largest floating solar PV plant once completed.