Indonesia : Sustainable and Inclusive Energy Program (Subprogram 2)

Sovereign Project | 49043-002

Project Details

  • Project Officer
    Kitt, Florian
    Southeast Asia Department
    Request for information
  • Country/Economy
    Indonesia
  • Sector
    • Energy

Related Projects

Project Name Sustainable and Inclusive Energy Program (Subprogram 2)
Project Number 49043-002
Country / Economy Indonesia
Project Status Closed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3561-INO: Sustainable and Inclusive Energy Program (Subprogram 2)
Ordinary capital resources US$ 400.00 million
Loan 8330-INO: Sustainable and Inclusive Energy Program (Subprogram 2)
ASEAN Infrastructure Fund US$ 100.00 million
Loan: Sustainable and Inclusive Energy Program (Subprogram 2)
Agence Francaise de Developpement US$ 110.00 million
KfW Bankengruppe US$ 210.00 million
TA 9370-INO: Scaling up Energy Efficiency
Clean Energy Fund under the Clean Energy Financing Partnership Facility US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Energy sector development and institutional reform
Gender Equity and Mainstreaming No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy
Impact Domestic energy security and access to modern forms of energy increased (National Medium-Term Development Plan, 2015 2019)
Project Outcome
Description of Outcome Supply from sustainable and more accessible energy options increased
Progress Toward Outcome The program continued to make progress towards the four 2020 outcome indicators which together should result in more sustainable energy supplies and increased electrification rates. Given that the share of renewables in the electricity mix surpassed the expected outcome of 10% with over 11% in 2017 already and an increase in the electrification rate to 95.8% which is close to the program target of 97% the program is well on track.1) PLN's key financial performance measures within levels acceptable by international norms (2014 baseline: debt equity ratio within acceptable levels)2) Number of large power projects led by independent power producers that reach financial closure increased to at least five per year (2014 baseline: two)3) Total sector investment in oil and gas increased to $23 billion (2014 baseline: $19.3 billion)4) Percentage of households connected to electricity increased to 96% (2014 baseline: 84%)5) Renewables account for 10% of the electricity generation mix (2014 baseline: 6%)
Implementation Progress
Description of Project Outputs

Fiscal sustainability and sector governance improved

Private participation in power and gas markets enabled

Regulatory environment for increased access to clean energy options improved
Status of Implementation Progress (Outputs, Activities, and Issues) Output 1: The government periodically adjusted power tariffs for large users and phased out subsidies for the remaining household consumer categories. This led to higher tariffs for 22 million out of the 45 million consumers in these categories, and reduced annual subsidy payments to PLN by at least $2.1 billion in 2017. The diesel subsidy was reduced from Rp1,000 to Rp500 per liter, which saved the government $2.5 billion in 2017. The government also established reporting requirements for electricity business licensees, including PLN, on their operating assets, in addition to service quality standards. Output 2: The Ministry of Energy and Mineral Resources (MEMR) and the Investment Coordination Body (BKPM) further simplified the licensing process for power plants, transmission line projects, and selected projects in oil and gas. To secure financing for power system expansion, the government increased its guarantee program by budgeting up to $27.4 billion to provide credit guarantees for PLN's engineering, procurement, and construction contracts, and extending investment guarantees for private power projects.31 It expanded support for private investments in the upstream gas market by improving fiscal terms for the exploration of unconventional resources and introducing a process for the sale of flared gas for use in various power applications. It also took measures to increase the use of natural gas in the domestic market, including lowering the price of gas for certain industries that use gas as a raw material; introducing a new risk- and revenue-sharing model for new PSC blocks; and allowing large users like PLN to import liquefied natural gas for power plants. Also, the government established a mechanism to pre-finance activities in expiring PSCs by the incoming operator to prevent any production decrease during the transition, along with issuing a gas infrastructure master plan andan updated gas supply-and-demand balance. These reforms have helped increase investment in oil and gas by over 24% from 2014 to 2016 despite low global gas prices. Output 3: The government issued implementing regulations to the revised Geothermal Law that provide guidance on tendering of new concessions, sharing of revenue with local governments, and accessing forest land for geothermal power development. It also issued guidance for procurement of renewables-based electricity by PLN to support the first gigawatt of solar power and 280 megawatts of wind capacity in the country, and an additional 4 gigawatts of geothermal capacity by 2023, including stipulation of ceiling prices for each renewable energy technology. The government has expanded its focus on electrification through efforts led by PLN and local governments, budgeted $38 million in 2017 in special allocation funds for local governments, and set technical standards for renewable energy power plants in off-grid and remote areas. In terms of energy efficiency, the government established the legal basis for ESCOs and prepared draft regulations to expand the number of appliances governed by efficiency standards and labels. It also launched a nationwide program for energy-efficient streetlights in 73 cities. To lower emissions from the electricity subsector, the government is supporting the deployment of waste-to-energy projects and the pilot-testing of CCS and/or CCUS technologies. TA 9370 is under implementation. The analytical work was delayed due to changes in the leadership on energy efficiency at the counterpart agency. The analysis and capacity-building activities are now fully under way.
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The new regulation on geothermal access to conservation forest was identified as an environmental safeguards risk and measures have been identified via Rapid Safeguards Assessment to mitigate these risks.
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The project is a joint operation with AFD, KFW, and the World Bank, and co-financing partners have held wide-spread stakeholder consultations.
During Project Implementation The project team consulted intensively during project implementation via outreach and technical assistance activities.
Responsible ADB Officer Kitt, Florian
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Coordinating Ministry for Economic Affairs also known as Kementerian Koordinator Bidang Perekonomian (KKBP)
[email protected]
2nd Floor, Jl Lapangan
Banteng Timur 2-4
Jakarta Pusat 10710
Ministry of Energy and Mineral Resources
JL. Medan Merdeka Selatan No. 18
Jakarta Pusat 10110
Timetable
Concept Clearance -
Fact Finding 31 Oct 2016 to 07 Nov 2016
MRM 25 Apr 2017
Approval 14 Sep 2017
Last Review Mission -
Last PDS Update 10 Apr 2019

Loan 3561-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Sep 2017 28 Sep 2017 12 Dec 2017 31 Mar 2018 - 05 Jan 2018
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 720.00 Cumulative Contract Awards
ADB 400.00 17 Jun 2022 400.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 320.00 17 Jun 2022 400.00 0.00 100%

Loan 8330-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Sep 2017 28 Sep 2017 12 Dec 2017 31 Mar 2018 - 08 Jan 2018
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 100.00 Cumulative Contract Awards
ADB 0.00 17 Jun 2022 0.00 100.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 100.00 17 Jun 2022 0.00 100.00 100%

TA 9370-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Sep 2017 14 Mar 2018 14 Mar 2018 31 Aug 2019 31 May 2021 09 Jul 2021
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,000,000.00 0.00 0.00 0.00 0.00 1,000,000.00 17 Jun 2022 989,126.38

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

Tender Title Type Status Posting Date Deadline
Clean Energy Finance Coordinator Individual - Consulting Closed
Clean Energy Finance Specialist Individual - Consulting Closed
Clean Energy and Energy Effiency Analyst to Individual - Consulting Closed
National Program Coordination Consultant Individual - Consulting Closed
National Clean Energy Economist Individual - Consulting Closed
Firm Firm - Consulting Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Policy and Advisory Technical Assistance 9370 06 Apr 2018 EPS Capital Corp(UNITED STATES) in association with Stricker Associates Inc() | l development services in countries 653 Conestoga Road Villanova, Delaware, ia 19085 United States *** No Executing Agency for this TA *** 796,000.00 —

Procurement Plan

None currently available.