ADB pilots energy efficiency support for Indonesian exporters

The Asian Development Bank (ADB) s extending a USD30 million loan to assist Indonesia embark on major energy efficiency improvements in export industries. The loan is part of a USD200 million ADB is providing to Indonesia Eximbank, the country's official export credit agency.

Availability of long term, affordable US dollar-denominated loans has been sharply curtailed by the global financial crisis. Indonesian producers looking to upgrade plants and purchase equipment to make energy cost savings and meet new international energy management standards are unable to source funds.

"This pilot investment in energy efficiency will demonstrate to local commercial banks the viability of investing in projects with paybacks within five years, and will help pave the way for future replication," said Madeleine Varkay, the ADB's Project Team Leader.

ADB estimates show that energy efficiency improvements by exporters could cut peak electricity demand by around 2.5 gigawatts - equivalent to the current power shortfall faced by Indonesia's state electricity company.