📋 Tender Overview
Scope :
The affordable and sustainable energy transition program will support the government of indonesia in achieving its enhanced nationally determined contribution (ndc), 2022 and its power subsector net-zero emission target by 2050 through various policy measures to accelerate energy transition in the country. the program is a milestone intervention in indonesias shift of focus from securing energy supply to a transition to clean energy for sustainable growth. it leverages the momentum created by indonesias climate and energy transition commitments made in 2022. the program will be designed to align well with the climate focus of asian development banks (adbs) country partnership strategy for indonesia, 2020-2024 and the principles of adbs energy policy. it also seeks to contribute to three operational priorities of adbs strategy 2030 : accelerating progress in gender equality, tackling climate change, and strengthening governance and institutional capacity.
the program will be a programmatic approach policy-based lending (pbl) with two subprograms. however, the reform actions may require a third subprogram, which will be determined during subprogram 2 preparation. energy transition requires a multiyear staggering of reform actions and a programmatic approach rather than a single pbl.
The rapid expansion of electricity generation capacity has helped indonesia overcome much of its power supply issues, but it has left the system heavily reliant on fossil-fuel-based power sources like coal, gas, and diesel. adb-supported sustainable and inclusive energy program was aligned with the governments previous target of 23% of renewable energy in power generation mix by 2025. although the share of renewable energy in the electricity generation mix improved from 12.3% in 2013 to 18.2% in 2021, achieving this target remains a challenge given the growing demand and the limited progress in renewable energy development over the last 5 years. the main reasons for the lagging progress lie in the need for improvement in three areas: (i) clear pathway to energy transition, (ii) sufficient transmission grid capacity, and (iii) enabling regulations for clean energy investments. the proposed program will support policy actions to address these issues in the reform areas of (a) policies and regulatory framework for clean energy transition established, and (b) sector governance and financial sustainability improved.
the proposed subprogram 1 is an important milestone where detailed action plans are developed in close consultation with stakeholders, including the international partners group of indonesia just energy transition partnership. together with adbs result-based lending projets, nonsovereign transactions, and technical assistance, the program will provide a policy framework necessary for indonesias energy transition. since clean energy transition requires long-term consistent policy implementation up to and beyond 2030, a programmatic approach will help
