Global Gateway: The EU supports Indonesia’s clean energy transition
Jakarta, 24 November 2025 – The European Union (EU), under its Global Gateway strategy, in partnership with KfW Development Bank, PT Sarana Multi Infrastruktur (Persero) (PT SMI) and PT Perusahaan Listrik Negara (Persero) (PT PLN), is supporting Indonesia’s transition to clean energy as part of the Just Energy Transition Partnership (JETP).
The EU’s Global Gateway offer aims to enhance Indonesia’s renewable energy infrastructure and grid reliability in line with the EU and Indonesia’s commitments under the Paris Agreement and the JETP framework.
As part of Team Europe financial package of €3.4 billion for Indonesia’s energy transition, two EU-funded feasibility studies have just been awarded for two large-scale pumped-storage hydropower projects: the Indonesia Sumatra PSP (500 MW) in North Sumatra and the Indonesia Grindulu PSP (1,000 MW) in East Java.
Both projects are implemented through PT SMI, which also serves as the Country Platform Manager for Indonesia’s Energy Transition Mechanism (ETM) — a national initiative that coordinates blended financing and investment partnerships to accelerate a just and affordable energy transition.
Each feasibility study (FS) will assess the technical, financial, environmental, and social dimensions to ensure the projects’ long-term sustainability and bankability. The studies will form a comprehensive basis for strategic investment decisions while strengthening the long-term viability and sustainable growth of the pumped storage project development in Indonesia.
Project Overview
Indonesia Sumatra Pumped Storage (500 MW) – Located in Simalungun Regency, North Sumatra, the project uses Lake Toba as the lower reservoir and a new ring-dam upper reservoir. With an estimated investment of USD 580 million, the FS is being conducted by Norconsult Norge AS, with a focus on enhancing the flexibility and stability of the Sumatra power system.
Indonesia Grindulu Pumped Storage (1,000 MW) – Located in Pacitan, East Java, the project will have 4 × 250 MW units with an estimated cost of USD 1.3 billion. The FS is being undertaken by Consortium ILF Consulting Engineers (Asia) Ltd-PT Connusa Energindo-NEWJEC Inc. The project will strengthen the Java–Madura–Bali grid and support greater integration of renewable energy sources.
Background
During COP 28 in Dubai (2023), PT SMI, PLN, and KfW, supported by the EU, formalised their collaboration framework to accelerate Indonesia’s energy transition. The two feasibility studies announced in this release serve as concrete follow-ups to that agreement and represent tangible progress under the JETP, a Global Gateway flagship initiative.
PT SMI plays a central role in mobilising finance, coordinating investments, and fostering partnerships among domestic and international stakeholders to advance a just and affordable energy transition. In fulfilling this role, PT SMI places strong emphasis on social responsibility, ensuring that the transition benefits local communities, promotes equitable access to energy, protects livelihoods, and supports inclusive and sustainable economic growth across Indonesia.
“The EU is proud to contribute to Indonesia’s energy security objectives. These two large pumped storage sites - Sumatra and Grindulu - are important milestones under the Just Energy Transition Partnership, as they will contribute to strengthen grid stability and pave the way for large-scale renewable integration across the archipelago” said the EU Ambassador to Indonesia, H.E. Denis Chaibi.
“As a long-standing partner in the Indonesian energy sector, KfW is proud to support the preparation of these two pumped-storage hydropower projects of national importance. The technology is a key element for integrating renewables into the energy system and making Indonesia’s energy transition successful” added Burkhard Hinz, Director KfW Office Jakarta.
PT SMI’s Director of Public Financing and Project Development, Faaris Pranawa, stated that the two projects mark a concrete step toward building a clean, reliable, and secure energy system for Indonesia. He emphasised that, through comprehensive feasibility studies, each project will be developed in a responsible and sustainable manner.
“We believe that the collaboration between the European Union, KfW, PLN, and PT SMI will accelerate the realisation of a resilient and inclusive low-carbon energy system. This initiative not only strengthens Indonesia’s national energy infrastructure but also creates opportunities for knowledge sharing and innovation,” said Faaris Pranawa.
Meanwhile, PLN’s Director of Finance, Sinthya Roesly, expressed her appreciation for the financial support and strategic collaboration from the EU, KfW, and PT SMI in developing the pumped storage projects in Sumatra and East Java. She also expressed hope that the partnership would continue to enhance institutional coordination and foster a cleaner and more sustainable energy future for Indonesia.
“The cooperation between the European Union, KfW, PT SMI, and PLN marks an important milestone in achieving Indonesia’s net-zero emission target by 2060 or earlier. The pumped storage projects hold strategic importance in enhancing the flexibility of the national power system and strengthening the integration of renewable energy into the grid,” said Sinthya Roesly.
Both studies are core deliverables under the Indonesia’s JETP. They demonstrate how EU–Indonesia cooperation supports national decarbonisation efforts. The projects are key to enabling large-scale renewable energy integration and ensuring long-term energy security.
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About the partners
European Union (EU) – The EU is a political and economic union of 27 Member States. Together, the EU has built a zone of stability, democracy and sustainable development while maintaining cultural diversity, tolerance and individual freedom. The EU is the world’s largest trading bloc, and the world’s largest source and destination of foreign direct investment.
The 27 Member States of the EU are: Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.
"Team Europe" is the collective effort of EU, its Member States, the European Investment Bank (EIB), and the European Bank for Reconstruction and Development (EBRD) to present a unified and stronger response to global challenges. This approach coordinates and pools resources, expertise, and financial institutions to increase the effectiveness and impact of EU external action in partner countries, addressing global challenges like climate change and promoting sustainable development.
“Global Gateway” is the EU's positive offer to boost smart, clean and secure connections in digital, energy and transport sectors, and to strengthen health, education and research systems. The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States, and European development finance institutions. Together, we have mobilised more than €300 billion in public and private investments over the last 5 years, creating essential links rather than dependencies, and closing the global investment gap.
KfW Development Bank – One of the world’s leading development finance institutions implementing EU-supported green infrastructure programmes.
PT Sarana Multi Infrastruktur (Persero) – PT Sarana Multi Infrastruktur (Persero), established on February 26, 2009, is a State-Owned Enterprise under the coordination of the Ministry of Finance, in the form of a Non-Bank Financial Institution (LKBB). The company plays a role and has a mandate as an agent of sustainable development. It has three business pillars, namely Commercial Financing, Public Financing, and Advisory Service and Project Development.
PT Sarana Multi Infrastruktur (Persero) has various functions and unique products/features to support the acceleration of infrastructure development, which not only serves as infrastructure financing but also as an enabler through the implementation of the Government and Business Entity Cooperation (KPBU) scheme involving various financial institutions, both private and multilateral. The company actively supports the implementation of Public Private Partnership (PPP) and encourages the acceleration of infrastructure development in the regions through regional loan products.
PT Perusahaan Listrik Negara (Persero) – Indonesia’s national electricity company responsible for power generation, transmission, and distribution.