The Asian Development Bank (ADB) will provide a financing package totalling more than US$305 million for Jawa-1, Indonesia’s largest combined-cycle gas turbine (CCGT) power plant.
“ADB is a partner of choice in Indonesia’s strategy to finance low-carbon power generation through private sector participation,” said Michael Barrow, director general for ADB's Private Sector Operations Department. “This project will support the country’s efforts to strengthen the liquefied natural gas (LNG) supply chain and increase energy security, while helping to reduce power generation costs.”
The project comprises a 1,760-MW CCGT power plant and ancillary infrastructure in Cilamaya, Karawang, West Java. ADB’s financing package includes a direct loan of US$185 million, and a parallel loan of US$120 million provided by the Leading Asia’s Private Infrastructure Fund (LEAP), which is administered by ADB.
According to ADB, Jawa-1 will be one of the first and largest projects in Indonesia using LNG, demonstrating the Indonesian government’s commitment to reduce dependency on coal and diesel fuel in favour of cleaner domestic energy sources such as natural gas. The CCGT power plant will supply energy to PT. Perusahaan Listrik Negara (PLN), Indonesia’s national power utility. The project is expected to help Indonesia avoid 1.77 mil t of carbon dioxide emissions.
Jawa-1 is expected to power 11 million Indonesian households from 2021, supporting the country’s 100% electrification target by 2024. The project aims to create about 4,800 jobs during construction and 125 jobs when the plant is operational. It will also offer opportunities to improve women’s livelihoods through targets for women’s employment and training on livelihood and skills development to be monitored by ADB.
LEAP is one of ADB’s co-financing vehicles dedicated to private sector infrastructure in Asia and the Pacific. Japan International Cooperation Agency (JICA) supports the fund, launched in August 2016, through a US$1.5 billion equity commitment. Combined with ADB’s own capital and that of commercial partners, the fund is expected to provide financing of at least US$6 billion and enables ADB to boost support for quality and sustainable infrastructure.
ADB estimates that Indonesia needs infrastructure investment of US$1.1 trillion for 2016–2030, and US$1.3 trillion over that period if climate adaptation measures are included. Accelerating investment in affordable and sustainable energy is critical to achieve the country’s economic and social development goals.