The World Bank has recently granted approval for a substantial $1.14 billion project aimed at expanding access to cleaner electricity in Indonesia. The project will be supported with $500 million in financial aid from the World Bank, with an additional $600 million allocated for enhancing childhood nutrition.
Through the electricity project, approximately 2 million individuals residing in eastern Indonesia will gain access to the electrical grid. Furthermore, this initiative will facilitate increased investments in solar power while assisting Indonesia's state utility company, Perusahaan Listrik Negara (PLN), in strengthening its energy transition management capabilities. The World Bank emphasized that the project will be a collaborative effort, with co-funding contributions from the private sector, PLN, Canada Clean Energy and Forest Climate Facility, and the Clean Technology Fund.
In a statement, Manuela V. Ferro, Vice President for East Asia and the Pacific at the World Bank, highlighted the project's significance, stating that it will mobilize private sector financing to support Indonesia's energy transition and help communities adapt to the challenges posed by climate change.
Indonesia, which heavily relies on coal for its electricity generation, has set ambitious targets to reduce emissions by 32% by 2030 and achieve net-zero emissions by 2060.
In a separate development, the World Bank announced its approval of $600 million in financing to aid Indonesia's efforts in addressing stunting, a form of malnutrition affecting children's growth. A government survey released in January revealed that approximately 21% of Indonesian children under the age of five experienced stunted growth in 2022, accounting for approximately 4.5 million children.
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Indonesian President Joko Widodo has expressed his country's commitment to reducing the stunting rate to 14% by 2024.
The World Bank's financial support for both projects is expected to make a substantial impact on Indonesia's energy sector by promoting the adoption of cleaner electricity sources and ensuring the well-being of the nation's children through improved nutrition.
