The Asian Development Bank (ADB) has approved a grant worth $350 million (£210m) to support the construction of a geothermal plant in Indonesia.

The 320MW Sarulla Geothermal Power Development Project in North Sumatra – scheduled for completion in 2018 – is expected to cut 1.3 million tonnes of carbon emissions every year in the nation.

Indonesia currently uses coal and oil to produce 65% of its electricity but holds around 40% of the world’s geothermal resources, according to the ADB.

Jackie B. Surtani, Senior Investment Specialist in ADB’s Private Sector Operations Department said: “Geothermal power taps into an abundant indigenous resource in Indonesia that can provide a more sustainable and secure form of clean energy while significantly lowering carbon emissions.”

Indonesia aims to increase its share of renewable energy from 5% to 25% by 2025 and cut greenhouse gas emissions by 26% by the end of the decade.