ADB's USD500 million to be channeled for coal plants' retirement: Govt

Jakarta (ANTARA) - Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the USD500 million loan from the Asian Development Bank (ADB) for Indonesia's energy transition will be utilized for programs, including early retirement of coal-fired power plants.

"It is for, among others, the acceleration of transition or early retirement of (coal-fired) power plants. However, of course, there is a mechanism that must still be studied," he remarked after attending the Green Initiative Conference 2024 in Jakarta on Tuesday.

The minister stated that the loan's interest rate should still be re-checked, adding that the interest rates of loans from ADB are generally lower. The early retirement of coal-fired power plants is one of the policies of the Indonesian government to accelerate energy transition.

However, the program has been hampered by the need for quite high costs. Based on a study by the Institute for Essential Services Reform (IESR), the cost incurred to retire coal-fired power plants is estimated to reach USD4.6 billion by 2030 and USD27.5 billion by 2050.

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In the latest development, the Ministry of Energy and Mineral Resources stated that 13 coal-fired power plants had been included in the list for early retirement.

The ministry's Director General of New, Renewable Energy, and Energy Conservation, Eniya Listiani Dewi, stated here on Tuesday (August 20) that those power plants were identified after a study with the Bandung Institute of Technology and the United Nations Office for Project Services.