“Indonesia’s energy sector has suffered severe underinvestment due to long-standing subsidies on fuel and electricity,” Pradeep Tharakan, senior energy specialist in ADB’s Southeast Asia regional department, said. “This has resulted in poor access to modern forms of energy despite the country’s vast energy resource endowment.”
The loan program, which includes $100 million from the ADB-administered ASEAN Infrastructure Fund, will support President Joko Widodo’s reform agenda to improve overall governance in the energy sector by lowering subsidies, adopting cost-recovery-based tariffs and boosting the performance of state-owned enterprises, such as PLN, the state-owned electrical utility, ADB said.
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