ADB approves US$ 301 million- loan package for Indonesia power sector

The country is to get two loans totalling US$ 301 million from the Asian Development Bank (ADB) to improve its power sector, not just $140 million as earlier reported.

The bank will extend a $ 161 million loan for a project to expand the country's renewable energy generation capacity.

A second loan of $ 140 million would help set up a competitive electricity market in Java and Bali as well as cut transmission bottlenecks, ADB statements said.

The renewables initiative involves 12 projects that will add 82 megawatts of capacity in five remote regions of the outer islands and boost associatedpower distribution networks.

State-owned electricity company PLN is to provide the balance of the funding needed for the 256 million-dollar project, it said.

ADB would also administer an 800,000-dollar technical assistance grant from Denmark to pilot a scheme allowing 10,000 low-income families in outer islands to defer the start-up costs of connections.

"Adding renewable energy power plants will improve the supply and reduce pollution generated by fossil fuels," said ADB energy specialist Anil Terway.

The other loan would provide information and communications technology-based equipment to PLN that is needed to operate a competitive electricity market. (*)