REPUBLIKA.CO.ID, JAKARTA -- The Asian Development Bank (ADB) has approved US$500 million in loans for Indonesia to help stimulate the country's energy sector and sustainable economic growth.
"The project will help the Indonesian government to enhance energy security, as well as increase supply from renewable sources and natural gas in the future energy mix," Pradeep Tharakan, a senior energy specialist in ADB's Southeast Asia Regional Department, said in a press statement released on Saturday.
The loan will help Indonesia improve the energy sector which has seen underinvestment because of decades-old subsidies on fuel and electricity, he said.
The underinvestment has led to Indonesia lacking access to modern forms of energy although the country has abundant energy sources, he said.
The loan of which US$100 million comes from the ASEAN Infrastructure Fund managed by the ADB will be used to improve governance in the energy sector by reducing subsidies, implementing cost recovery-based tariffs and improving the performance of state electricity company PT Perusahaan Listrik Negara (PLN).
In addition, the program will also help streamline licensing procedure in the energy sector through one-stop services, allow private companies to benefit from PT PLN's transmission networks to sell electrical power to end users in remote areas and give certainty about regulations in the oil and gas sub-sector.
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