Indonesia wins $300m to expand geothermal energy generation

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In Indonesia, state-owned enterprise PT Geo Dipa Energi has won a $300 million loan from the Asian Development Bank to expand its geothermal energy generation.

PT Geo Dipa will expand its geothermal generation capacity by 110 MW in Java.

Furthermore, a $35 million loan from the Clean Technology Fund will be used to fund the project. ADB will also manage the loan.

Two geothermal plants will be constructed and commissioned at Dieng in Central Java and Patuha in West Java.

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The ADB loan will boost GDE’s capacity to plan and execute projects and undertake government-supported drilling, which aims to attract much-needed private sector investment to develop new geothermal areas.

Indonesia has the world’s largest geothermal potential, with an estimated 29 GW, and the world’s second-largest installed geothermal capacity of 2.1 GW, according to a statement.

Winfried F. Wicklein, ADB Country Director for Indonesia, said: “ADB’s geothermal project will help Indonesia combat climate change and make its electricity system more sustainable, reliable, and efficient. It will also help businesses and consumers access affordable, reliable, and modern energy.

“Our support is aligned with Indonesia’s long-term goals for economic growth and energy, including maximizing the use of indigenous energy resources, diversifying the fuel mix, and ensuring environmental sustainability.”

GDE President Director Riki Ibrahim, adds: “The project, recognized as a National Strategic Project by the government, will provide environmentally friendly base-load electricity to the Java”Bali electricity grid, reducing CO2 emissions by more than 700,000 tons per year.

“The project will build critical geothermal experience in Indonesia and contribute to the government’s efforts to attract private-sector investment in the sector by reducing early-stage project development risk.”

“ADB’s intervention will help make clean energy transition a key part of the country’s recovery from the pandemic. The project will create jobs for those supplying goods and services for drilling and construction, and will create livelihood opportunities in the local area,” said ADB Senior Energy Specialist for Southeast Asia Shannon Cowlin.

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