The Asian Development Bank (ADB) has approved a 500 million U.S. dollars loan for Indonesia to help the Southeast Asian country accelerate its energy transition agenda, the bank's official said on Saturday.

ADB Country Director for Indonesia Jiro Tominaga said in a statement that the loan would support the development of Indonesia's basic and collaborative policy that would be formulated to identify and address the complex challenges it faces in speeding up the transition into sustainable and clean energy.

"Indonesia is at a very important junction in its energy transition journey. It has rapid growth of power generation capacity that helps it overcome most of its electricity supply constraints. However, it has also made the country heavily dependent on fossil fuel-based power sources such as coal, gas and diesel," Tominaga said.

Therefore, he said, the loan would be mainly used in efforts to build a strong policy and regulatory framework to facilitate the transition to clean energy, strengthen sector governance and financial sustainability, and ensure an equitable and inclusive transition.

Indonesia, one of the world's largest producers and exporters of coal, is currently pursuing a reduction of carbon emissions to achieve net-zero emissions by 2060.

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