Sustainable Energy Access in Eastern Indonesia (RBL SNT)

Partner
State Electricity Company (PLN)
Project duration

2019-2023

Project volume
300 Mio EUR
Location
Sulawesi, Nusa Tenggara Timur, Nusa Tenggara Barat
Type of funding
Promotional Loan
Project approach
Results-based Lending
Project status
Completed

The programme aims to support the development of electricity distribution networks to connect businesses and households and improve the quality of life in Sulawesi and Nusa Tenggara through the sustainable use of electricity as a key to increasing economic activity.

Background

Indonesia has been on a stable growth trajectory for several years. Java and Bali, in particular, have grown significantly faster than the eastern parts of Indonesia. This is leading to ever-increasing regional income disparities between Java and Bali and the eastern provinces. Eastern Indonesia has enormous potential to develop new sources of sustainable and inclusive economic growth in sectors such as fishing, agro-industry, and tourism. However, this potential cannot be fully realized due to a lack of key infrastructure such as electricity supply, ports, roads, and communications networks. To improve this situation, the government had made accelerating infrastructure investments, including in the remote and eastern parts of the country, one of its main objectives as part of the National Medium-Term Development Plan (RPJMN) 2020-2024, with rural electrification playing a key role. The program built on this goal:
Although nationwide electrification was already at 99% by the end of 2019, electrification rates in eastern Indonesia, i.e., in some areas of Sulawesi, Papua, and North Kalimantan, were 80% or less. A key reason for this was the limited availability and quality of the power grid. The project presented here aims to address this.

Status of Implementation

The implementation phase ended on December 31, 2023. The programme was highly successful, with a target achievement rate of approximately 98%. The program’s implementation structure, as a RBL, was geared toward achieving concrete results, which guide the disbursement of funds. Target achievement was reviewed annually by an independent consultant. Indicators (Disbursement-Linked Indicators, DLIs), such as the expansion of the distribution network infrastructure and increased access to electricity services, were used to measure target achievement and the corresponding disbursement. The targets have been almost fully met. Accordingly, PT PLN is entitled to receive 98% of the loan amount. The final disbursement was made in October 2024, meaning PLN has received 98% of the loan amount in full.

Tools

Contact

Project Address

TBD

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