The government-backed Japan Bank for International Cooperation will help Indonesia to develop infrastructure for generating clean energy.
Officials of the bank and the Indonesian government signed a memorandum in Jakarta on Tuesday.
The bank will advise the government on ways to raise funds to build electric power plants. These would include facilities that use solar and geothermal energies and thermal power stations with low greenhouse gas emissions.
The bank will conduct a preliminary survey on constructing plants that will generate electricity from solar energy.
Indonesia has been constructing thermal power stations throughout the country because it has plentiful natural resources, such as coal and natural gas. But the country has made little progress in reducing its greenhouse gas emissions.
The bank says it wants to help raise money for clean energy plants and export Japan's technology to Indonesia.