The Asian Development Bank (ADB) will fund solar photovoltaic (PV) projects worth $40 million in Indonesia. The bank has announced a private sector financing package totaling $40 million to invest in Indonesia’s first utility-scale solar PV projects on a project-finance basis. ADB will finance 42 MW of solar PV projects in the country.

The loan package is part of a two-phased portfolio financing totaling approximately $160 million for new renewable energy investments in Indonesia.

The funds will be utilized to finance a 21 MW solar PV power project in Likupang, North Sulawesi, and three 7 MW solar PV power projects in Pringgabaya and Sengkol. The solar PV projects will supply energy to Perusahaan Listrik Negara (PLN), Indonesia’s national power utility.

The $40 million loan will also include financing from two trust funds administered by ADB, the Leading Asia’s Private Infrastructure Fund (LEAP), and the Canadian Climate Fund for the Private Sector in Asia II (CFPS II).

This $40 million financing is the second phase of ADB’s investment in renewable energy assets being developed by Vena Energy (Formerly Equis Energy) in Indonesia. The first phase, which was signed in December 2017, consisted of a 72 MW wind power plant in Jeneponto, South Sulawesi. ADB’s provided $120.8 million in financing to PT Energi Bayu Jeneponto, a subsidiary of Vena Energy.

“Indonesia has made a strong commitment to renewable energy, pledging to leverage the country’s considerable solar and wind energy resources to take renewables to 23 percent of Indonesia’s overall energy mix by 2025,” Vena Energy’s chief executive officer Nitin Apte was quoted as saying in a press release.

Indonesia has set a renewable energy target of 31 percent of overall energy mix by 2050. According to International Renewable Energy Agency (IRENA), the country has the potential to produce more than 700 GW of renewable energy, including 532.6 GW of solar power.

This is not the first time ADB has financed projects in Indonesia’s energy sector. In September 2017, the board of directors of the ADB approved two loans totaling $1.1 billion to strengthen and diversify Indonesia’s energy sector.

In December 2017, Mercom had reported that Indonesia was set to be the site of a 200 MW floating solar PV project that is poised to become the world’s largest floating solar PV plant when it is complete.