Indonesia: Accelerating Indonesia’s Clean Energy Transition Program (Phase 1)
Accelerates the country's transition to renewable energy and advances its goals for sustainable and low-carbon economic growth.
Sectors
EnergyCountry
IndonesiaPartners
European UnionUK Foreign, Commonwealth & Development Office
Agence Française de Développement
Kreditanstalt für Wiederaufbau
Approval
Financing
Total Project Cost
$1.6 billion
ADB Financing
$470 million
Includes $3 million from the GEAPP Energy Access and Transition Trust Fund
AIF Financing
$10 million
EU Cofinancing
$10 million
UK Cofinancing
$10 million
KfW Cofinancing
$351 million
AfD Cofinancing
$351 million
ISSUE
Rising electricity demand, fossil fuel dependence, and barriers to scaling clean energy.
Indonesia’s rapid economic growth is driving electricity demand that is expected to increase by 3.8–5.2% annually through 2060. Yet 85% of current power generation still comes from fossil fuels. The country’s power grid lacks the capacity to integrate large volumes of variable renewable energy, and private investment remains limited due to regulatory uncertainty, financial risks, and legacy coal contracts. Without major reforms and investment, Indonesia will not meet its target of sourcing 41% of electricity from renewable energy by 2040. Accelerating the transition is essential for energy security, economic growth, and long-term climate resilience.
SOLUTION
A multi-phase, results-based program to enable a just, affordable, and scalable energy transition.
Approved in November 2025, Phase 1 of the Accelerating Indonesia’s Clean Energy Transition Program is a landmark results-based lending operation supporting Indonesia’s long-term shift to clean electricity. Led by PLN and backed by ADB, AIF, and ACGF partners, the program will facilitate the deployment of grid-ready solar and wind projects, strengthen transmission infrastructure, and build institutional capacity to manage the energy transition. It introduces financing and risk mitigation mechanisms to attract over $1 billion in private investment and supports reforms to increase women’s participation in the energy sector. The program also enhances environmental safeguards and lays the foundation for future regional power integration under the ASEAN Power Grid. Phase 1 is expected to add 3,000 GWh of new renewable generation annually, avoid at least 2.5 million tons of CO₂ equivalent per year, and position Indonesia to achieve its clean energy and development goals.
How did ACGF help?
The Accelerating Indonesia’s Clean Energy Transition Program builds on policy and institutional reforms supported by ADB and AIF through the Sustainable and Inclusive Energy Program, which ran from 2015 to 2022. Those earlier reforms—focused on sector governance, financial sustainability, and private sector participation—laid the groundwork for a long-term, system-wide transition effort. Drawing on lessons from this earlier engagement, ACGF supported environmental and social due diligence for preparation of the new program, including the expansion of a spatial mapping tool to help avoid high-biodiversity and critical-habitat areas in solar and wind development. Additional support focused on increasing women’s participation in the energy workforce through inclusive recruitment strategies and outreach to female university students. ACGF also helped align the program with its climate, gender, and safeguard investment principles—ensuring these priorities were embedded from the outset.
Project Data Sheet