Jakarta (ANTARA) - The Finance Ministry and state electricity firm PT PLN have signed a subsidiary loan agreement (SLA) for funding the development of pumped storage hydropower under the Java-Bali System Project.

The project has a total loan value of US$610 million, consisting of a loan from World Bank of US$380 million and a US$230-million loan from Asian Infrastructure Investment Bank.

"SLA is one of the financing sources used by PT PLN to finance power plant projects in Indonesia, especially for renewable energy power plants," Finance Ministry's director general of treasury, Hadiyanto, said in Jakarta on Monday.

It is also expected to support the energy transition and help Indonesian reach its goal of cutting carbon emissions and achieving the 23-percent renewable energy mix target by 2025 and net-zero emissions by 2060.

Meanwhile, the SLA financing commitment for new renewable energy that has not been distributed has reached US$197.5 million or Rp2.82 trillion. The energy financing that has been processed stands at US$957.5 million or Rp13.66 trillion.

The financing is being used for hydropower and geothermal development projects and green finance facilities.

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Moreover, the Subsidiary Loan Agreement for the energy sector is distributed to PT PLN, state oil and gas firm PT Pertamina, and state infrastructure financing firm PT SMI.

"The provision of SLA has given tremendous benefits to various sectors," Hadiyanto said.

The benefits include energy infrastructure development for achieving the 35 thousand-MW electricity program through financing for transmission, substations, and electricity plants operating on both non-renewable and renewable energy.

Furthermore, other sectors can also feel these benefits, such as transportation, health, and trade.

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Translator: Astrid H, Kenzu T
Editor: Rahmad Nasution
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