The private sector financing package will be used to invest in Indonesia’s first utility-scale solar photovoltaic (PV) plants. Credit: Asian Development Bank.

The Asian Development Bank (ADB) is set to provide around $40m as loan for the development of the first utility-scale solar photovoltaic (PV) power plants in Indonesia.

The private sector financing package will be provided on a project-finance basis and is part of a two-phased portfolio financing, worth nearly $160m, for the country’s new renewable energy investments.

The investment will help develop the renewable energy assets being built by Vena Energy (erstwhile Equis Energy).

The loan will support construction, operation, and maintenance of a wind farm and four solar PV plants in eastern Indonesia.

In December last year, the first phase was signed and involves the development of a 72MW wind power plant in Jeneponto, South Sulawesi.

Vena Energy subsidiary PT Energi Bayu Jeneponto received a total of $120.8m financing package from ADB, which includes financing from ADB’s two trust funds, Leading Asia’s Private Infrastructure Fund (LEAP) and Canadian Climate Fund for the Private Sector in Asia II (CFPS II).

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The second and the newly announced phase includes a 21MW solar PV power plant in Likupang, North Sulawesi and three 7MW solar PV power plants in Pringgabaya, Selong, and Sengkol in Lombok, West Nusa Tenggara.

Vena Energy’s four subsidiaries will receive the $40.2m fund to develop the plants. LEAP and CFPS II will also provide loans to the subsidiaries.

Once completed, the wind and solar power plants will supply energy to Indonesia’s’ national power utility, Perusahaan Listrik Negara (PLN).

ADB Southeast Asia, East Asia, and the Pacific Private Sector Operations Department Infrastructure Finance Division director Jackie Surtani said: “By supporting a sector-changing financing for renewable energy, with an innovative portfolio approach, ADB and Vena Energy have been able to add over 114MW of clean energy to Indonesia’s electricity grid, while helping reduce the country’s dependence on fossil fuels and promoting renewable energy development.”

Indonesia aims to produce 23% of its energy from renewable sources by 2025.