The World Bank approved a $2.13 billion investment package for Indonesia to boost economic growth and expand clean energy access across the country. The funding, announced on June 16, pilots WB’s new step-up loan product, and is marked as the first one backing Indonesia’s goal to reach high-income status by 2045, according to a World Bank Group press release.
The new Indonesian government, established in the autumn of 2024, plans to invest in human capital development, expand electricity access nationwide, and reform the financial sector with World Bank support.
The package includes a $1.5 billion policy reform program to strengthen Indonesia’s financial sector through digital services expansion and capital market growth. The second component, the ISLE-2 program, will bring electricity to 3.5 million people and add 540 MW of solar and wind capacity.
“The reforms and investments we are supporting with this blended finance package of over $2 billion will help implement key government priorities,” said Manuela Ferro, World Bank Vice President for East Asia and the Pacific.
The energy program expects to cut power generation costs by 8% and reduce greenhouse gas emissions by 10% in Kalimantan and Sumatra. The project also pilots the World Bank‘s new step-up loan product, offering favorable interest rates with built-in incentives to attract private investment.
This investment represents a major step toward Indonesia’s development goals while advancing regional energy security through interconnected grid systems.
