The Asian Development Bank (ADB) has announced that it is providing $305m financing for the construction of Jawa-1, the 1.7GW combined-cycle gas turbine (CCGT) power plant in Indonesia.

ABD Indonesia

Image: ABD to support 1.7GW power plant in Indonesia. Photo: Courtesy of The Asian Development Bank.

The power project will be located in Cilamaya, Karawang, West Java. The financial packaging offered by ADB will include a loan of $185m and parallel loan of $120m offered by Leading Asia’s Private Infrastructure Fund (LEAP), which is administered by ADB.

Considered to be one of the largest projects in the country, the Jawa-1 will be fuelled by LNG and is claimed to be the Indonesian government’s commitment of reducing coal and diesel fuel dependency in favour of a cleaner alternative such as natural gas.

Power generated from the plant will be supplied to PT. Perusahaan Listrik Negara (PLN), the national power utility and it is touted to help avoid 1.77 million tons of carbon dioxide emissions from entering the atmosphere.

Electricity generated from the plant will help in powering 11 million Indonesian households from 2021, when the project becomes operational and will support the country’s aim of 100% electrification target by 2024. The construction phase will create about 4,800 jobs and 125 jobs, when the plant is operational.

ADB private sector operations department director general Michael Barrow said: “ADB is a partner of choice in Indonesia’s strategy to finance low-carbon power generation through private sector participation. This project will support the country’s efforts to strengthen the liquefied natural gas (LNG) supply chain and increase energy security, while helping to reduce power generation costs.”

In 2005, ADB provided a loan of $350m for the greenfield development of Tangguh natural gas liquefaction facility, which is a likely source of LNG for Jawa-1.

Last month, the development bank provided financial support to build the 275MW combined cycle gas turbine power plant in Riau province in central Sumatra in the country. The finance included $70m loan from ADB and $82m loan from Sumitomo Mitsui Banking and MUFG Bank. The International Finance Corporation (IFC) had agreed to provide $50m for the plant.