JAKARTA (REUTERS) - Indonesia will begin work on a 145 megawatt (MW) floating solar power project, the largest in South-east Asia, after state power utility Perusahaan Listrik Negara (PLN) and Masdar of United Arab Emirates agreed financing for the project on Tuesday (Aug 3).

Indonesia aims to have 23 per cent of its energy from renewable sources by 2025 and the government has said the country will try to reach net zero emissions by 2060 by moving away from coal.

"By securing the financial support for this project, we can immediately start the construction stage," PLN chief executive Zulkifli Zaini said in an online briefing on Tuesday.

"We are optimistic that, with the support of all stakeholders, this environmentally friendly project can start commercial operation on schedule," he added.

A joint venture between a unit of PLN and Masdar in West Java, the Cirata floating photovoltaic power plant is expected to be the largest of its kind in South-east Asia and is scheduled to begin commercial operation in November 2022.

Financing of the project was arranged through Sumitomo Mitsui Banking Corp, Societe Generale, and Standard Chartered Bank, Masdar said in a separate statement on Tuesday.

Construction of the project is under way, the statement added.

PLN has said it will start to gradually shut down its coal-fired power plants, which currently meet around 60 per cent of Indonesia's energy demands.

Around half of Indonesia's estimated 417 gigawatt (GW) renewable energy potential could come from solar power, but less than 0.1 per cent of that potential has been utilised, senior energy ministry official Dadan Kusdiana said during the online briefing.

"We ask that PLN push for renewable development, including solar, considering Indonesia's potential for floating solar plants," he said.

Indonesia has 375 lakes or reservoirs where PLN could set up floating solar plants and generate an additional 28 GW of power, he added.