The hydropower plant will help Indonesia to meet electricity demand and support its decarbonisation goals.
The World Bank has approved a $380m loan for the development of the first pumped-storage hydropower plant in Indonesia.
The loan will be used to build the 1,040MW Upper Cisokan plant located between Jakarta and Bandung.
World Bank Indonesia and Timor-Leste country director Satu Kahkonen said: “We are excited about this project as it will be the first of its kind for Indonesia.
“It represents a turning point for Indonesia’s decarbonisation pathway.
“The World Bank will continue to support Indonesia in its efforts to achieve resilient, sustainable, and inclusive development that will benefit the people of Indonesia now and in the future.”
The Upper Cisokan plant will make use of two water reservoirs located at different heights.
When there is low electricity demand in the region or an excess of clean energy available from sources such as solar energy, power from the grid will be used to pump water to the upper reservoir.
The plant will be located near the two large demand centres to reduce increasing transmission loads on the grid.
Once completed, it will help Indonesia to meet its peak electricity demand while supporting the country’s energy transition and decarbonisation goals.
At present, more than 80% of the power generated for the Java-Bali grid comes from fossil fuels. The grid supplies electricity to 70% of the country’s population.
The Upper Cisokan plant will give more consumers in Java and Bali access to an environmentally friendly and reliable electricity supply.
It will also help the government to integrate variable renewable energy into the Java-Bali grid.
Indonesian Energy and Mineral Resources Minister Arifin Tasrif said: “The Indonesian government is committed to reducing greenhouse gas emissions through, among others, [the] development of renewable energy, energy conservation and use of clean energy technology.
“Emission reduction in the energy sector will be driven by new and renewable energy generation and application of energy efficiency.”