Indonesia, home to the world’s fourth-largest population, is experiencing rapid economic growth, projected at 5% in 2025, and expected to increase to 8% by 2029. Industrial expansion and rising consumption are driving electricity demand, which is increasing by 4–5% annually and will continue to rise over the coming decades. Yet 85% of power generation still comes from fossil fuels, and renewable energy development is not keeping pace with demand.

On 18 November 2025, ADB approved Phase 1 of the Accelerating Indonesia’s Clean Energy Transition Program—a landmark, multi-phase effort that will guide Indonesia’s shift to renewable energy over the next 10–15 years. Phase 1 alone provides $1.6 billion in results-based lending to develop solar and wind power projects and strengthen power grid infrastructure. It also enhances institutional capacity to manage the energy transition. Overall, Phase 1 is expected to avoid 2.5 million tCO₂e annually and catalyze more than $1 billion in private investment.

AIF’s strategic collaboration with ADB to contribute to Indonesia’s clean energy transition began in 2015 with the Sustainable and Inclusive Energy Program. Building on years of joint efforts, subprogram 3—approved for financing in November 2022—marked the first ACGF-supported energy program in the region. This longstanding collaboration now extends to the first phase of the Accelerating Indonesia’s Clean Energy Transition Program, a landmark initiative and the largest to date in terms of combined ACGF partner contributions.