MANILA, Oct. 2 (UPI) -- Indonesia needs financial support to diversify an energy sector that's outdated despite the vast deposits of natural reserves, the Asian Development Bank.
Pradeep Tharakan, a regional specialist for the ADB, said chronic underinvestment in the energy sector left the country lacking access to modern forms of energy. The ADB said it supported a $500 million loan to help stimulate investments and energy sector reform.
"The project will help the government to enhance energy security, as well as increase supply from renewable sources and natural gas in the future energy mix," Tharakan said.
Natural gas production in Indonesia increased by more than 20 percent in the decade ending in 2012, the U.S. Energy Information Administration reports. The country exports about half its natural gas and is one of the largest exporters of liquefied natural gas in the world.
ADB said the loans would support government efforts to build a renewable energy sector centered around small-scale hydropower, geothermal and biomass programs. The program would also back cleaner power options like natural gas.
Indonesia in September submitted a request to reactivate its membership in the Organization of Petroleum Exporting Countries. The country left OPEC in 2009 because it was no longer a net exporter.
Italian energy company Eni and its partners at French energy company Engie, formerly GDF Suez, and its Indonesian partners signed a deal to purchase and sell up to 1.4 million tons of LNG per year from the Jangkrik complex starting in 2017.
Asian economies, the bank said, combine for about 37 percent of all global emissions and dependency on fossil fuels remains high even though 600 million people in the region still lack access to electricity.