World Bank Supports Sustainable Electricity in Eastern Indonesia

The World Bank has approved a new program to increase access to sustainable and lower-cost electricity in eastern Indonesia.

IDXChannel - The World Bank has approved a new program to increase access to sustainable and lower-cost electricity in eastern Indonesia. The program will also strengthen infrastructure resilience and support communities’ ability to adapt to climate change.

The Indonesia Sustainable Least-cost Electrification-1 (ISLE-1) Program will connect 500,000 new customers – around 2 million people – to the electrical grid, scale up solar power investments to reduce greenhouse gas emissions and lower the cost of power generation by 20 percent. It will also enhance the capacity of Indonesia’s electrical power company, PT. PLN Persero, to manage the energy transition.

The program will support Indonesia’s shift to low-emission development through affordable, reliable, and sustainable energy. Indonesia’s energy sector is expected to become the highest contributor to greenhouse gas emissions in the country by 2026. The Government of Indonesia has committed to reducing emissions by close to 32 percent by 2030.

“The ISLE-1 Program will mobilize private sector finance for Indonesia’s energy transition and help communities adapt to climate change. Households in poor communities in Eastern Indonesia islands will have access to more reliable and sustainable electricity and businesses will see less interruption to their production.” said World Bank Vice President for East Asia and the Pacific, Manuela V. Ferro, in a media release on Tuesday (27/6/2023).

“This project is an example of how the World Bank Group is helping countries integrate climate action into their development plans and mobilize private sector finance for development," he added.

The program will support upgrades of PLN’s operational systems and business processes and will reinforce the grid for renewable energy integration and electrification in Indonesia’s east. The project will help low-income communities that lack access to affordable energy. It will help reduce reliance on polluting forms of energy, such as diesel generators and kerosene lamps.

ISLE-1 focuses on two regions: Maluku and Nusa Tenggara, as they have among the lowest levels of electrification and the highest average generation cost of electricity in Indonesia.  The Program will finance PLN’s goal to reach universal access to electricity, deploy solar generation, reduce generation costs, and strengthen PLN’s financial and operational capacity. 

"PLN, with the support of the World Bank, is expected to be able to increase its energy security by expanding energy infrastructure and diversifying the energy mix with renewable sources," said Darmawan Prasodjo, PLN Executive Director. (WHY)