Indonesia is set to nearly double its geothermal energy capacity following the approval of a new climate investment plan by a group of international multilateral development banks.

The $400 million fund is designed to transform Indonesia’s use of renewable energy and has been approved by the Trust Fund Committee of the Clean Technology Fund (CTF), whose backers include the World Bank and the Asian Development Bank (ADB).

The plan will use co-financing from the CTF to expand large-scale geothermal power plants as well as promote energy efficiency and other renewable energy technologies. It aims to create risk-sharing facilities and address financing barriers to small and medium-scale investments.

“The greater availability of power supplies will help the government of Indonesia reach its objective of providing electricity access from the present 65 per cent of the population to 90 per cent by 2020,” said 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.”

Indonesia is the fourth Asian country to have a CTF-funded investment plan for the deployment of low-carbon technologies – following in the footsteps of the Philippines, Thailand and Vietnam.

The CTF – one of two Climate Investment Funds – is designed to finance the demonstration, deployment and transfer of low-carbon technologies for greenhouse gas emission reductions within country investment plans. CTF support in Asia now stands at $1.2 billion.

“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.”