ADB Supports Renewable Energy by Investing in Indonesian Geothermal Plant

ADB, 31 March 2014

MANILA, PHILIPPINES – The Asian Development Bank (ADB) has signed a $350 million financing package supporting the construction of the 320 megawatt Sarulla Geothermal Power Development Project in North Sumatra, Indonesia, an investment expected to unlock clean energy investments across the country, which holds 40% of the world’s geothermal resources.

The renewable energy project will provide clean, baseload power to an Indonesian grid currently dominated by aging coal and oil-fired power plants. It is expected to reduce 1.3 million tons of carbon dioxide emissions per year upon completion, which is estimated to be in 2018.

“Geothermal power taps into an abundant indigenous resource in Indonesia that can provide a more sustainable and secure form of clean energy while significantly lowering carbon emissions,” said Jackie B. Surtani, Senior Investment Specialist in ADB’s Private Sector Operations Department.

Indonesia currently uses coal and oil to produce 65% of its electricity and fuel its economic growth. The country has vowed to increase the share of renewable energy in its primary energy supply from 5% in 2010 to 25% by 2025, and reduce greenhouse gas emissions by 26% by 2020. Geothermal plants typically produce less than 10% of the greenhouse gas emitted by fossil-fuelled thermal plants.

Under the loan package, ADB will provide $250 million from its ordinary capital resources, $80 million from the ADB Clean Technology Fund (CTF), and $20 million from the Canadian Climate Fund for Private Sector in Asia (funded by the Government of Canada) under the Clean Energy Financing Partnership Facility. The project represents the first deployment by ADB of the Canadian Climate Fund and the first disbursal of CTF funds by ADB in Indonesia.

ADB’s climate finance capabilities were instrumental in establishing the first commercially financed, utility-scale geothermal independent power plant project in Indonesia in more than a decade. The climate funds were structured as an innovative loan tranche that bridged the financing gap between banks and investors to maintain financial viability of the project.

The project sponsors are Itochu Corporation, Kyushu Electric Power Company, Ormat International, and Medco Power Indonesia.

Six commercial banks – Bank of  Tokyo-Mitsubishi UFJ, ING Bank, Mizuho Bank, National Australia Bank, Société Générale, and Sumitomo Mitsui Banking Corporation – will also co-finance the total $1.17 billion loan package, which ADB and Japan Bank for International Cooperation (JBIC) acted as Lead Structuring Banks.

The project will be developed and implemented under a 30-year energy sales contract with Perusahaan Listrik Negara, the national electricity utility company, a 30-year joint operating contract with Pertamina Geothermal Energy, and a 20-year guarantee from the Ministry of Finance.

RI gets US$500,000 in assistance from ADB

Esther Samboh, The Jakarta Post, Jakarta, Mon, 09/19/2011

The Asian Development Bank (ADB) has announced plans to channel grants and loans to improve the Indonesian government’s capacity in developing infrastructure projects through public and private partnership (PPP).

“The technical assistance, amounting to US$500,000, provided by the government of Japan through the Japan Fund for Poverty Reduction (JFPR) will support the government in preparing PPP projects that are economically sound, financially attractive to private sector financiers and affordable to the government,” the Manila-based regional development lender says in a statement released Monday.

The technical assistance is planned to be implemented in 2011, with the National Development Planning Agency (Bappenas) as an executing agency and Sarana Multi Infrastruktur

state infrastructure fund manager being responsible for implementing the activities.

ADB’s technical assistance program is aimed at assisting developing countries in planning and executing projects that it finances with grants and loans, its website says.

“This will support the government’s objective in increasing the number and value of commercially attractive and sustainable PPP projects offered to the private sector,” ADB's principal infrastructure specialist Bob Finlayson said.

The government is seeking to mobilize about $140 million worth of investment in infrastructure over the next five years, of which 60 percent is to be sourced from the private sector. While the government has developed a number of PPP projects, they have not attracted significant market interest due to concerns over project design, preparations and implementation, the ADB statement says.

ADB Provides $100 Million for Rural Infrastructure, Sanitation in Indonesia

ADB, 8 Aug 2011

MANILA, PHILIPPINES – The Asian Development Bank (ADB) is providing Indonesia with a $100 million loan to finance community-driven projects that upgrade basic infrastructure in rural villages and improve sanitation services in poor urban neighborhoods.

The loan will expand ADB’s support for the National Program for Community Empowerment (PNPM Mandiri) for poverty reduction by providing direct assistance to poor communities.

While Indonesia has made significant progress in fighting poverty and achieving the Millennium Development Goals (MDGs), about 31 million people, many of them in rural areas, remain trapped in poverty. The causes of poverty include lack of access to basic services, absence of economic opportunities, limited access to capital, and poor rural connectivity and infrastructure.

About half of rural villages are not connected by asphalt road, and one in every ten villages are inaccessible at certain times of the year. In addition, only about half of the national population has access to improved sanitation. Consequently, some 30% of Indonesians suffer from water-borne diseases, including diarrhea and typhoid fever, that are linked to the use of untreated water and poor sanitation.

“The project will provide block grants directly to the communities to improve basic infrastructure facilities and sanitation services, including the construction of public baths, toilets and washing facilities, as well as waste treatment and disposal systems,” said Wolfgang Kubitzki, ADB Principal Social Sector Economist.

“Around 1.3 million people in rural communities and urban neighborhoods in nine provinces in Indonesia will benefit from the project,” he added.

The project will also improve the capacity of the communities to carry out their own design and implementation of the projects to ensure that the investments reflect the need of the communities and are sustainable.

The ADB loan, from its ordinary capital resources, covers about 73% of the total project cost of $135.6 million, with the government financing around 19% and beneficiaries providing the balance in the form of counterpart contributions to community investments.

The Ministry of Public Works is the executing agency for the project, which is due for completion around March 2015.

About ADB

Yudhoyono Opens International Corruption Conference

Jakarta Globe, May 10, 2011

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Fighting corruption is not just a moral imperative but also a democratic, political, social, and economic obligation, President Susilo Bambang Yudhoyono says.

Yudhoyono made the statement in his opening address at the International Conference on Foreign Bribery in Business Transactions 2011 in Bali on Tuesday.

Present in the conference were Corruption Eradication Commission (KPK) officials and representatives of law enforcement and corruption eradication from the G-20, OECD, APEC and Asian Development Bank, as well as national and foreign observers.

“This gathering is truly a corrupter's worst nightmare! Thank you for taking part in this very important conference, to talk about combating bribery in international business transactions,” Yudhoyono said, adding that fighting graft had been a cornerstone of his administration.

Commenting on bribery cases, the president said the money spent on bribes meant the money was not used to improve roads, schools and hospitals.

“By turning a blind eye to a bribe here and a bribe there, we are compromising the quality of life for ourselves, our parents, our children. We all pay the price. Ultimately, bribery robs all of us of true progress and economic growth,” Yudhoyono said.

He said that even today, systemic corruption continued, and in developing countries, it did so by taking advantage of the global financial network.

The corrupt exploit the international financial network, covering their tracks in foreign jurisdictions, he said, adding that as long as these “safe havens” existed, people would continue to siphon money and send it overseas, he said.

“We cannot keep on supporting this endemic problem,” the president said, adding that the World Bank estimated that bribery accounted for some 3 per cent of the world’s economy, or more than $1 trillion dollars.

He said bribery was prevalent in tax evasion efforts, and it was also rife in the investment sector, particularly foreign investment.

But Yudhoyono said law enforcement agencies were not keeping idle for some 150 companies and individuals, in more than 10 countries have been charged with bribery and duly punished.

“Today, some 250 cases remain under investigation. Yet, these efforts have not been enough.”

Antara

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ADB to funnel $500 m for RI geothermal power plants

Rangga D. Fadillah, The Jakarta Post, Jakarta | Wed, 03/02/2011

Indonesia will receive a US$500 million (Rp 4.4 trillion) loan from the Asian Development Bank (ADB) to build three geothermal-fired power plants with a total capacity of 165 megawatts, a senior official says. 

The secretary to the alternative and renewable energy and energy conservation director general at the Energy and Mineral Resources Ministry, Djajang Sukarna, said Wednesday that the power plants would be constructed in Sungaipenuh in Jambi, Karaha in West Java and Mataloko in East Nusa Tenggara.

“We’ll sign the deal in late 2011 and start construction of the power plants next year,” he said on the sidelines of a meeting with ADB and the National Development Planning Board (Bappenas) in Jakarta.

He said Pertamina Geothermal Energy (PGE), a subsidiary of state oil and gas firm Pertamina, would handle the upstream operation at the Sungaipenuh power plant, while state electricity company PT PLN would handle the downstream operation.

 “At the Karaha power plant, all businesses will be operated by PGE. For the Mataloko plant, PLN will take full control,” said Djajang.

ADB $250 Million Risk Program to Help Expand Microfinance to the Poor

Asian Development Bank (ADB), 13 December 2010

MANILA, PHILIPPINES - The Asian Development Bank's (ADB) Board of Directors today approved a Microfinance Risk Participation Program, marking ADB's first large scale private sector microfinance initiative.

The program will allow ADB to partner with financial institutions that actively lend to microfinance institutions (MFIs) in ADB's developing member countries, and to share the default risk on underlying MFI loans. The proposed program will support the expansion of lending to MFIs, in turn enabling increased provision of financial services to the underserved. This will help address the significant unmet demand from the poor for financial services, and provide additional funding for micro-borrowers. Under the terms of the program, ADB will typically assume up to 50% of the default risk on loans made to MFIs, in aggregate up to a maximum of $250 million.

"Microcredit has been shown to play an important role in providing seed money for businesses and improving the lives of the poor," said Philip Erquiaga, Director General of ADB's Private Sector Operations Department. "This program will allow microfinance institutions to expand lending to segments of the population who currently lack access to funds."

The microfinance industry has boomed in recent years with Asian institutions estimated to have over 47 million borrowers as of the end of 2008, with outstanding loans of over $10 billion. Demand is enormous, with as many as 600 million to 1 billion poor workers worldwide needing services, including a large number in Asia and the Pacific, home to two-thirds of the world's poor. Microfinance businesses seeking to serve this market are hampered by limited access to finance from banks, exchange rate issues, and other barriers.

The risk sharing arrangement, proposed by ADB to a range of international and local financial institutions, will allow these participants to boost loans to microfinance institutions, which in turn will result in scaled up assistance to groups currently unable to access funds, such as poor households, women and cash-strapped small enterprises.

"Under this arrangement, commercial financing institutions which are developing microfinance operations will be able to achieve greater lending scale without overextending their risk exposure," said Mr. Erquiaga.

ADB's risk support will enable participating institutions to build up their microfinance lending operations, which will help extend the reach of the commercial microfinance sector as a whole, and contribute to the development of the private sector.

ADB has been a major supporter of the microfinance and microenterprise sector for almost two decades with up to $1.9 billion in aggregate assistance for approved projects since 1988. It has extensive experience in risk sharing activities through its Trade Finance Program, under which it provides risk coverage to international banks to support trade transactions.

About ADB

ADB $3 Million Grant to Help Victims of Indonesia's Volcano Eruption

Asian Development Bank (ADB) , 10 December 2010

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is extending $3 million to assist in aid efforts in the wake of the Mount Merapi volcano eruptions, which destroyed homes and displaced hundreds of thousands of people in Central Java province and Yogyakarta Special region in October and November 2010.

ADB's assistance will be used to build temporary shelter, normalization of public facilities (i.e. schools, health care, water and sanitation) and setting up a cash for work scheme for the refugees to clear debris.

More than 300 people were killed and over 400,000 people were forced to flee their homes because of the eruption, according to the Indonesian Agency for Disaster Management. Many evacuees have left the evacuation points to return home after the government downgraded the alert level of the volcano in early December, more than five weeks since it began erupting. The government warned, however, that there was still a danger of volcanic mud flooding homes and properties.

"There are still thousands of families who cannot return to their villages because they were destroyed by the volcanic eruption," said ADB President Haruhiko Kuroda. "ADB will do whatever it can to support the government's efforts to provide them with temporary shelters and other essentials they need."

The $3 million grant is being provided under ADB's emergency facility, the Asia Pacific Disaster Response Fund, which provides quick-disbursing grants to help restore essential life-saving services following disasters.

ADB is coordinating its aid efforts with the Government of Indonesia, the United Nations and other development partners.

About ADB

BP Indonesia says no change to Indonesian strategy

Reuters, Tue Jul 27, 2010 11:57pm EDT

July 28 (Reuters) - BP Indonesia, a unit of BP plc (BP.L) (BP.N), on Wednesday said there was no change to its strategy or plans in Southeast Asia's biggest economy and that it wants to expand and find new opportunities in Indonesia.

The statement follows BP's announcement on Tuesday that it plans to sell $30 billion in assets over the next 18 months to help cover its liabilities resulting from the Gulf oil spill.

"In Indonesia, there is no change to our strategy and plans. Indonesia is an important area for BP," BP Indonesia president, William Lin, said in an email to Reuters.

"We will continue to manage our existing operations in a safe and efficient manner, as well as continuously look to grow these assets and access new opportunities through further development, exploration and renewal," he said.

BP has a 37.16 percent stake in Indonesia's Tangguh liquefied natural gas (LNG) project in Papua, in the easternmost part of the sprawling archipelago, which has capacity to produce 7.6 million tonnes per year (tpy) through two trains.

The Tangguh project cost about $5 billion. Other partners in the project include China National Offshore Oil Corp (CNOOC) (0883.HK).

Tangguh has several foreign supply contracts, including a 2.6 million tpy contract with CNOOC, while U.S. firm Sempra Energy (SRE.N) has a 20-year contract to lift 3.6 million tpy, and there are also supply contracts withSouth Korean firms K-Power and POSCO (005490.KS).

BP also has a stake in Sanga Sanga gas field in East Kalimantan, Borneo island, and has also participated in a coalbed methane (CBM) project in the same area in East Kalimantan.

(Reporting by Muklis Ali; Editing by Sara Webb)

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ADB Extends $35 Million for Sanitation Improvement in 2 Indonesian Cities

Jakarta Globe, July 20, 2010

Indonesia.The Asian Development Bank (ADB) is extending a $35 million loan to help Indonesia rehabilitate and expand sanitation facilities in the cities of Medan and Yogyakarta.

Medan, the capital of North Sumatra province, and Yogyakarta, the capital of Yogyakarta province, have a combined population of around 4.5 million people.

The loan will be used to build around 280 communal sanitation facilities in poor areas in the two cities, as well as two wastewater treatment systems for low-cost housing development projects in Medan.

Sewerage systems will be rehabilitated and expanded with up to 28,000 additional household connections.

The Metropolitan Sanitation Management and Health Project will also provide support to mobilize community involvement in the planning, operation and maintenance of communal facilities, and will ensure women are strongly involved in the process.

“A gender action plan in the project design will ensure women fully participate in the decision-making process for the development of facilities, and that they benefit equally with men from improved communal services,” said Rudolf Frauendorfer in ADB’s Southeast Asia Department.

Sanitation services have steadily improved in Indonesia, but still lag behind many neighboring countries, with partial sewerage coverage only available in a small number of urban centers.

Since the Asian financial crisis of 1997-1998, new sanitation investments have been postponed and existing treatment systems have deteriorated due to lack of repair and maintenance.

As a result, many of the poor living in informal settlements suffer high rates of diarrhea, skin diseases and other illnesses caused by polluted water and untreated waste.

“This project will sharply reduce pollution of surface and shallow groundwater in the two cities, resulting in improved health and quality of life particularly for women, children and the elderly who suffer the most from unclean environments,” Mr. Frauendorfer said.

The loan is structured to ensure that operating and maintenance spending on revenue-generating services can be fully funded from user tariff income by the middle of 2014, while remaining affordable to low-income communities.

Insufficient revenue for service providers and low user charges, which deter private investment in new facilities, have been a major impediment to the expansion of sanitation services.

To complement the loan, ADB will provide a $500,000 grant from its Technical Assistance Special Fund to strengthen the capacity and management capabilities of local governments, utilities and communities involved in providing or overseeing sanitation services.

Further technical assistance of $1 million in the form of a grant from the Government of Australia, will be administered by ADB.

The loan has a 25-year term, with a five-year grace period and an interest rate determined in accordance with ADB’s LIBOR-based lending facility.

The government of Indonesia will provide additional funding of $14.2 million, with regional governments committing $13.5 million, and provincial governments almost $500,000, for a total project of about $63.2 million.

The Ministry of Public Works is the executing agency for the project which is expected to be completed around December 2014.

ADB Calls for Asia and Pacific to Make Transition to Solar Power

Asia Development Bank, 6 July 2010

MANILA, PHILIPPINES - Many countries in Asia and the Pacific are well-suited to solar power initiatives, and incentives and low-cost financing mechanisms should be made available to help the region make the transition possible, Asian Development Bank (ADB) President Haruhiko Kuroda said yesterday.

“The Asia and Pacific region has the right combination of elements – demand for energy, access to sunlight and arid land, technological maturity, and a sound investment climate,” Mr. Kuroda said at the First Asia Solar Energy Forum in Manila.

However, Mr. Kuroda said that obstacles such as high up-front capital costs of investing in solar energy and a high-risk perception had to date been keeping many solar energy investors on the sidelines.

“As a result, there is a risk of ‘Solar Divide’ where developing countries cannot receive the benefit of environmental technology despite its large potential,” Mr. Kuroda said. “The role of multilateral development institutions, such as ADB and its partners, should be to play a catalytic role to overcome these institutional capacity, policy, technology, and financing barriers.”

The two-day forum, a part of the Asian Solar Energy Initiative (ASEI) announced by ADB earlier this year, brought together some 200 policy makers and solar energy-related professionals from 34 ADB member countries.

The event was hosted by ADB in partnership with the International Energy Agency (IEA), the United Nations Industrial Development Organization (UNIDO), and the Renewable Energy and Energy Efficiency Partnership (REEEP).

Under ASEI, ADB targets to catalyze projects for about 3,000 megawatts in solar power by 2013. The ASEI also includes the establishment of a knowledge platform named the Asia Solar Energy Forum, support for project preparation, and direct financing of solar energy projects.

It will also help raise concessional funds from donor countries to partly mitigate risks of the high up-front capital costs of investing in solar energy, and design other innovative ways to attract private-sector investment.

In her closing remarks at the Manila event on Tuesday, Vice-President for Knowledge Management and Sustainable Development Ursula Schaefer-Preuss said the forum represented a step towards a solar energy revolution in the Asia and Pacific region.

“Solar power has the potential to promote low-carbon growth, ensure energy security, increase access to energy for all and achieve ADB’s overall objective of poverty reduction,” she said. Ms. Schaefer-Preuss also announced that the second meeting of the forum will take place in Tokyo in December.

About ADB

EU to fund Indonesia's education program

English.news.cn, 2010-05-25 14:11:10

JAKARTA, May 25 (Xinhua) -- The European Union (EU) on Tuesday signed an agreement in which it provided grant worth 2.4 trillion rupiah (about 258.3 million U.S. dollars) to Indonesia for the new "Education Sector Support Program", to support the country's effort towards achieving the education-related Millennium Development Goals and providing nine years of quality basic education to all children by 2015.

Minister of National Education Muhammad Nuh in his remarks said that the government saw the provision of qualified education to all children as one of key priorities.

"Therefore, we welcome the new EU grant," said Nuh.

The Education Sector Support Program will be jointly supported by the EU and AusAID from Australia, whose contribution is expected to be announced later this year.

The EU grant contribution will be channeled as sector budget support and as such will directly support key policies and strategies in the new education of 2010-2014 to improve nation- wide access, quality and governance in basic education services.

As part of the EU-funded 258.3 million dollars contribution to the Education Sector Support Program, the EU will provide 240 million rupiah (about 25,931 dollars) over five years to support the government with technical expertise and access to international knowledge and best practices, in order to implement necessary reforms to achieve its education objectives.

The technical cooperation component will be managed by the Asian development Bank (ADB).

The signing ceremony took place in the two-day "Indonesia Education Partnership Forum" organized jointly by the Ministry of Education and the EU.

The forum gathered ten development partners of the EU to share and discuss with Indonesian government representatives and education stakeholders the lessons learned from their support to basic education.

ADB, FMO of the Netherlands to Share Risk on Trade Finance in Asia

Asian Development Bank

MANILA, PHILIPPINES - The Asian Development Bank (ADB) today signed a risk distribution agreement with the Netherlands Development Finance Company (FMO), which will lead to greater and wider support for trade in ADB's developing member countries.

The risk distribution agreement is part of ADB's $1 billion Trade Finance Facilitation Program (TFFP), which provides loans and guarantees through, and in conjunction with, international banks and ADB's developing member country banks to support international trade transactions.

Read the full news release.

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ADB hands over rescue equipment worth US$3 million to W. Sumatra

Syofiardi Bachyul Jb, The Jakarta Post, Padang, Thu, 04/15/2010 7:30 PM

The Asian Development Bank (ADB) has given a US$3 million grant in the form of rescue equipment to the West Sumatra provincial administration.

The handover of the grant was done through the National Disaster Mitigation Agency at the West Sumatra governor office in Padang on Thursday.

The equipment is designed to help rescue efforts in 11 cities and regencies prone to natural disaster in West Sumatra.

The rescue device consists of a modern communication car, equipped with satellite communication for any emergency situation during the disaster when telephone lines are usually broken.

It also consists of another rescue car, three motorcycles, one communication unit, rubber boats, tents, and computer units.

Forum kicks off, $5b worth of projects on offer

Aditya Suharmoko, The Jakarta Post, Jakarta | Thu, 04/15/2010 9:37 AM

Asia’s premier infrastructure forum, Infrastructure Asia 2010, kicked off in Jakarta on Wednesday with the host country, Indonesia, showcasing projects worth US$5 billion under its public-private partnership (PPP) scheme.

Among the high-profile projects offered is the 10,000 kilometer beneath-the-sea fiber optic cable that will connect Papua with the rest of the country’s broadband telecommunications network.

Indonesia is also offering another project that will directly link the country’s broadband network to Australia.

The projects are estimated to cost Rp 5.5 trillion (US$610.5 million) and up to Rp 2 trillion respectively.

Communications and Information m Technology Minister Tifatul Sembiring said the broadband connection to Papua would be the final phase of an ambitious project to connect all the telecommunication hubs in the country through a 50,000-kilometer-long fiber-optic cable.

“We just managed to build up to Sulawesi,” he said, adding that Papua is the only major island that has yet to have a fiber-optic cable broadband connection.

Now state telecommunications firm PT Telkom is building 1,500 kilometers of fiber-optic cables connecting Mataram and Kupang worth Rp 800 billion, he said.

Tifatul said the broadband connection to Australia would stretch from Kupang in East Nusa Tenggara to Darwin in Australia’s Northern Territory. The connection will serve as an alternative route to connect to the global telecommunications network.

“Now the only one we have is Jakarta-Singapore-Taiwan-US. If it breaks down we lose all connections,” he said.

The planned Kupang-Darwin connection, he said, “may cost Rp 1 trillion to Rp 2 trillion,” adding that Australian firms will likely be interested in the project.

Tifatul expects that when the broadband projects are completed in 2012 Internet connections will be faster and more reliable answering complaints addressed by users that internet connections in Indonesia are often slow.

He also said the ministry aims to raise the number of mobile phone users to 100 percent of Indonesia’s 230 million population. “Now we have 130 million users,” he said.

In the exhibition, other infrastructure projects offered for this year include those in transportations, roads, ports, airports, energy and housing.

Projects include 2x1,000-megawatt coal-fired power plants in Pemalang, Central Java, which would require between $2.6 and $3.0 billion in investment; coal-transporters and a railway in Central Kalimantan connecting Purukcahu and Bangkuang, requiring between $1 and $1.2 billion; a waste-management power plant in Bandung, West Java, costing $120 to $150 million; and a water supply project in Umbulan, East Java, requiring between $300 and $400 million, to provide water to cities including Sidoarjo, Pasuruan, Surabaya and Gresik.

The Infrastructure Asia exhibition, held at the Jakarta International Expo in Kemayoran, Jakarta, is supported by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in association with the World Bank and the Asian Development Bank.

The exhibition is held in conjunction with the Asia-Pacific Ministerial Conference on PPPs for infrastructure development, where President Susilo Bambang Yudhoyono is scheduled to deliver a speech today.

The conference is expected to result in a joint declaration on infrastructure development by all the attending ministers.

Multilateral Development Banks (MDBs) Step Up Their Fight Against Corruption with Joint Sanction Accord

Asian Development Bank, 9 April 2010

LUXEMBOURG - Taking a major step in the global fight against fraud and corruption, leading Multilateral Development Banks (MDBs) today signed an agreement to cross debar firms and individuals found to have engaged in wrongdoing in MDB-financed development projects.

The new accord, which applies to debarments that exceed one year, includes: the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group, and the World Bank Group. Sanctions by MDBs typically include reprimand, conditions on future contracting, or debarment -declaring a company or individual ineligible to participate in any future activities it finances, either for a period of time or permanently. Public debarment, which carries with it both financial and reputational risks, is considered a major deterrent to wrongdoing. Under the new agreement, entities debarred by one MDB may be sanctioned for the same misconduct by other participating development banks.

Read the full news release.

Indonesia Gets $100 Million to Improve Java-Bali Power Distribution Systems

Asia Development Bank, 23 March 2010

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and Agence Française de Développement are providing $100 million in loans to help Indonesia overhaul a key power distribution network in a bid to save energy and cut greenhouse gas emissions.

The ADB Board of Directors today approved a loan of $50 million for the Java-Bali Electricity Distribution Performance Improvement Project. The state-owned French development agency is providing a cofinancing loan of the same amount, which will be administered by ADB.

The project will rehabilitate the overburdened distribution network of the two islands, as well as supporting the introduction of energy efficient compact fluorescent lamps and light emitting diodes. The measures will help reduce peak power load demand and system losses, and contribute to sizeable cuts in greenhouse gas emissions. It will support PT Perusahaan Listrik Negara’s (State Electricity Corporation [PLN]) plan to invest about $1.2 billion in efficiency investments in the distribution sector between 2010 and 2014.

“The project will reduce the power sector’s carbon dioxide emissions by 330,000 tons per year, while the substantial energy savings and freeing up of 200 megawatts of equivalent distribution system capacity will allow the state electricity corporation to connect about 1.2 million additional customers to the Java-Bali network,” said Sohail Hasnie, Principal Energy Specialist in ADB’s Southeast Asia Department.

To make energy savings of 400 gigawatt-hours worth an estimated $60 million a year, the project will reconfigure electrical equipment, reconductor or replace old overhead distribution lines and voltage transformers, and introduce new switching stations and capacitors. The distribution of up to 500,000 quality compact fluorescent lamps and light emitting diodes in remote areas will help demonstrate the energy savings and greenhouse gas reduction benefits of efficient lights, which last far longer and consume much less energy than commonly used incandescent bulbs.

The project is expected to be eligible for carbon credits under the Clean Development Mechanism of the Kyoto Protocol, and carbon dioxide cuts could generate close to $200,000 a year in credits for the next 5-7 years, paving the way for potential nationwide distribution of the fluorescent lamps. The value of avoided carbon dioxide emissions as a result of the project is estimated to be around $3.5 million a year.

"Indonesia recently announced that it plans to reduce CO2 emissions by 26% by the year 2020 so PLN and ADB, together with the Government of Indonesia, view this project as a step towards meeting this goal," said Mr. Hasnie.

Indonesia’s energy demand has risen sharply in recent years, but investment in new capacity has not kept pace, resulting in regular power outages in Bali and Java, and up to 90 million people - or 38% of the population - still lack access to electricity. The economy relies on costly fuel oils for over 30% of its generation needs, limiting the government’s ability to fund new infrastructure, and putting Indonesia among the top 20 polluters in the world.

PLN is now planning to sharply expand the use of coal for power generation to reduce reliance on imported oil in the short term, and the project will help offset some of the new emissions. Once the conservation and efficiency benefits of the project are proven, it will be scaled up into a sector-wide initiative, funded by a multitranche financing facility.

ADB’s loan, from its ordinary capital resources, has a 25-year term, including a five-year grace period, with interest determined in accordance with its LIBOR-based lending facility. The Agence Française de Développement loan has a 15-year term, including a five-year grace period, with interest set in accordance with the Euro Interbank Offered Rate. A $1 million grant from the multidonor Clean Energy Fund under the ADB-administered Clean Energy Financing Partnership will finance the distribution of the fluorescent lamps and light emitting diodes, while the state electricity corporation will provide $19 million equivalent, for a total project cost of $120 million.

PLN is the executing agency for the project, which is due for completion by May 2012.

About ADB

Indonesia joins top rank of climate action leadership

The Jakarta Post, Ursula Schaefer-Preuss and Katherine Sierra , Manila | Tue, 03/23/2010 10:03 AM | Opinion

One of the first international meetings to focus on climate finance since the Copenhagen summit last December ended here in Manila this week with plans to allocate some US$1.1 billion from the new multilateral Climate Investment Funds (CIF) for country-led, low-carbon growth in the Asia and Pacific region.

Indonesia features prominently in these plans.

Some $400 million in support from the Clean Technology Fund (CTF), approved in Manila on Monday, will help mobilize some $2.7 billion in public and private sector financing to help Indonesia nearly double its geothermal capacity and transform the country’s use of renewable energy, ultimately supporting the government’s objective of meeting its goal of reducing greenhouse gas emissions by 26% by 2020.

In further support to achieving this target, Indonesia is also among the countries named this week that will receive funding for pilot programs to reduce emissions from deforestation under the Forest Investment Program (FIP).

Both programs for Indonesia were approved in advance of the CIF Partnership Forum. It is fitting that this meeting was held in Asia, for this is the region where more people — especially women and the poor — are vulnerable to climate change impacts than in any other part of the world.

On top of that, Asia’s energy demand is projected to almost double by 2030, which means that unless development and consumption patterns shift the region will soon become the largest source of new greenhouse gas emissions.

The CTF plan for Indonesia is designed to transform the country’s development pattern while supporting its continued economic growth.

It will help unlock geothermal power resources to expand people’s energy access while avoiding greenhouse gas emissions, to green urban areas, and to make it financially attractive to tap into the sun’s power.

Indonesia has the world’s largest geothermal power potential, and the plan allocates extensive co-financing to expand large-scale geothermal electricity generation.

It will also accelerate initiatives to promote energy efficiency and use of renewable energy sources by creating risk-sharing facilities and addressing financing barriers to small- and medium-scale investments.

The low-carbon growth investments in Indonesia are an example of similar programs now approved to receive CTF financing in Kazakhstan, the Philippines, Thailand and Vietnam.

Taken together, these programs will demonstrate how future energy demands can be satisfied in ways that will not generate excessive levels of greenhouse gases.

From our vantage point as multilateral development bank partners in helping countries implement these CTF-funded plans, this bold action on the part of Indonesia and other Asian nations is a harbinger of a fundamental shift in climate action around the globe.

And the same sorts of actions are moving forward in developing countries in every region of the world.

While developing countries have not been the primary source of climate-altering greenhouse gas emissions from the past burning of fossil fuels, they are taking positive actions to help achieve a global solution to the common challenge posed by climate change.

As they continue on a path to improved economic prosperity for their citizens, they are making a wise choice to do so in a climate-friendly way that will also help ensure their energy security and improve their quality life.

This climate-smart approach offers lessons which all, including those in developed countries, can look to emulate in coming years.

The CTF is founded on partnerships between policymakers, indigenous peoples, private sector entities, civil society and others.

Its unique governance structure provides equal voice to contributor and recipient countries and it also ensures that the programs it supports are embedded in national development plans.

The CIF’s were created in response to the Bali Action Plan, which resulted from the 2007 climate change talks in Indonesia, and called for commitment of new and additional financial resources from developed countries for developing countries to help address the climate change challenge.

A group of developed nations then pledged over $6 billion to the CIFs — a powerful signal of their serious support for developing countries, in helping them to respond to climate change.

Without measures to build resilience to climate change impacts, we know that the 60% of the working population in Asia and the Pacific who rely on agriculture for their livelihoods will suffer tremendously.

Fresh-water availability will fall, irrigation will become more difficult, and millions more children will go home hungry.

The CIFs expect to pilot measures that will support better water and forest management and agricultural adaptation measures that can ensure food security for Asia and the world.

The potential to replicate alternative approaches to energy and food production can transform development, placing us all on a more stable and sustainable footing.

As developing countries pick up the climate reins, we must all stand together to ensure their commitment to climate action is supported at the global level.

The need is enormous, and so is the funding and knowledge gap.

Developed countries must continue to provide financing for investments and knowledge, and a new regime for climate action must emerge. Without such actions, the progress achieved so far cannot be sustained.

Together, the global community must test and apply effective ways to combine reducing poverty, providing economic growth, and building a climate-smart greener future.

The meetings in Manila, buoyed by Indonesia’s climate action, offer an important and welcome glimpse into such a future.

At the Asian Development Bank and World Bank, along with our fellow development banks with whom we have joined in a first-time alliance on this issue, we pledge our support to make this future a reality.

Ursula Schaefer-Preuss is vice president for knowledge management and sustainable development at the Asian Development Bank. Katherine Sierra is vice president for sustainable development at the World Bank.

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Ban Ki-moon: Don't wait for disaster

Program to change our water ways

The Jakarta Post, Jakarta | Mon, 03/22/2010 10:16 PM

The UNESCO office in Jakarta is working with the Public Works Ministry and the Asian Development Bank on a pilot project along the Citarum River basin in West Java on a program called SWITCH-in-Asia, a press release made available on World Water Day said Monday.

SWITCH, a program for Asia, is a collaborative action research and demonstration program designed to encourage the development of sustainable cities with respect to water use.

The program aims at providing better services to all people, to prevent water quality destruction via optimizing recovery and reuse schemes, the release said.

“The current water practices have proven to be grossly inefficient and unsustainable. We need to radically rethink the way we live and deal with water,” said Hubert Gijzen, director of UNESCO’s regional science bureau for Asia and the Pacific.

“We can no longer afford to deal with water issues in a fragmented, ad hoc and incident-driven manner,” he said.

A paradigm shift in water use also applies to those who have access to water, Gijzen said. As an example, he said, many households unnecessarily used clean purified water to flush their toilets.

Indonesia's Energy Sector Gets $400M From Global Climate Funds

ADB / WB

MANILA, PHILIPPINES (16 March 2010) – Indonesia's geothermal power capacity is set to nearly double following the endorsement of a new climate investment fund plan. The $400 million plan, endorsed by the Trust Fund Committee of the Clean Technology Fund (CTF), will help transform Indonesia's use of renewable energy and ultimately support the government to meet its long-term goal of reducing greenhouse gas emissions by 26% in 2020.

The plan will use co-financing from the multilateral CTF to expand large-scale geothermal power plants and to accelerate initiatives to promote energy efficiency and renewable energy by creating risk-sharing facilities and addressing financing barriers to small- and medium-scale investments. Under the Indonesia plan, the CTF is slated to mobilize an additional $2.7 billion from a range of other sources.

"The greater availability of power supplies will help the Government of Indonesia reach its objective of providing electricity access from the present 65% of the population to 90% by 2020," said Asian Development Bank (ADB) Vice-President for Knowledge Management and Sustainable Development, Ursula Schaefer-Preuss. "Through the utilization of a cleaner fuel source, geothermal development will also result in better health benefits and more energy access for poor people," she said.

Indonesia is the fourth Asian country to have a CTF-funded investment plan for the deployment of low-carbon technologies endorsed by governments – following in the footsteps of the Philippines, Thailand and Viet Nam. The Trust Fund Committee's endorsement of Indonesia's plan raises the level of CTF support to Asia to $1.2 billion, mobilizing a total of nearly $13 billion from government, private sector, and other sources for Asia's move to become a leader in the use of clean energy.

"The Climate Investment Funds are about demonstrating what can be done at scale and the Indonesia plan stands out," said World Bank Vice-President for Sustainable Development, Katherine Sierra. "Indonesia has the largest geothermal energy potential in the world. The co-financing will help Indonesia reduce the use of fossil fuels to meet its rapidly growing energy needs. It also gives a clear signal on the practical actions developing countries can take to combat global climate change," she said.

In addition to the Indonesian plan endorsement, the CTF meeting in Manila on Monday also endorsed plans for Colombia (CTF $150 million, leveraging an additional $2.85 billion from other sources, including private sector), Kazakhstan (CTF $200 million, leveraging $1.1 billion) and Ukraine (CTF $350 million, leveraging $2.3 billion).

The new endorsements bring the total of CTF-funded Investment Plans to 13. Egypt, Mexico, Morocco, South Africa, and Turkey already have Investment Plans endorsed and are in the process of developing and implementing projects, and five countries in the Middle East and North Africa have undertaken a $750 million regional Investment Plan for scaling up concentrated solar power.

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The Climate Investment Funds (CIF) are unique financing instruments designed to test what can be achieved to initiate transformational change towards low-carbon and climate-resilient development through scaled-up financing channeled through the Multilateral Development Banks. The Clean Technology Fund (CTF) finances scaled up demonstration, deployment and transfer of low-carbon technologies for significant greenhouse gas reductions within country investment plans; and the Strategic Climate Fund (SCF) finances targeted programs in developing countries to pilot new climate or sectoral approaches with scaling-up potential.

Both the CTF and SCF trust fund committees have equal representation from developed and developing countries. Recognizing the imperative of climate change deliberations underway in the UN Framework Convention on Climate Change (UNFCCC), the CIF were designed as an interim measure to strengthen the global knowledge base for low carbon and climate-resilient growth solutions.

The CIF are implemented jointly by the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Finance Corporation, and World Bank.

For more information, please visit: http://www.climateinvestmentfunds.org.

For more information, please contact:

Robert Bisset
Senior Communications Officer
World Bank
Mobile +1 (202) 415 9646
rbisset@worldbank.org

Philip Wood
Media Relations Specialist
Asian Development Bank
Tel (632) 632-4132
pwood@adb.org

Indonesia to offer infrastructure projects worth $5 billion

Aditya Suharmoko, The Jakarta Post, Jakarta | Wed, 02/17/2010 1:14 PM

Indonesia will host an Asia-Pacific ministerial conference from Apr. 14 to Apr.17, offering infrastructure projects worth at least US$5 billion, officials say.

The 2010 Asia-Pacific Ministerial Conference on Public-Private Partnerships (PPP) for Infrastructure Development will be held at the Jakarta International Expo in Kemayoran, Central Jakarta, supported by the United Nations Economic and Social Commission for Asia and the Pacific, in association with the World Bank and the Asian Development Bank.

"We estimate $5 billion worth of projects can be marketed," Bastary Panji Indra, director of PPP development at the National Development Planning Agency (Bappenas), said Wednesday.

The projects include the construction of a power plant in Pemalang in Central Java and a railway network in Central Kalimantan, he said.

Dedy S. Priatna, deputy of infrastructure at Bappenas, said Indonesia needs Rp 450 trillion ($48.6 billion) between 2010 and 2014 from the PPP to speed up the development of infrastructure projects.