Approved financing package worth US$ 225 million has been setup to assist Indonesia to meet its growing electricity demand. This financing also provided to make electricity supplies in Java and south-central Sumatra more rialiable. It is expected that the projets will benefit over 56 million people in Java and Sumatra as well as supporting economic growth over the medium to long term.
According to Chris Hoban, Acting Country Director for the World Bank in Indonesia, “A reliable and sustainable supply of electricity is essential for Indonesia to realize its potential as a large middle-income economic power. At present however, Indonesia’s economy is growing at a pace that exceeds its ability to provide electricity. To keep up with demand, electrification rates would need to grow at a rate of around seven percent per year.”
Currently, Indonesia is facing electricity shortage in several areas. Increasing population as well as the warming economic activities is leading to the higher electricity demand for each year. Some new coal-steam plants are developed through loans and private partnership.
This WB financing notably increases Indonesia debt for energy sector.