The Asian Development Bank (ADB) recently signed a US$92.6mn financing agreement with PT Supreme Energy Muara Laboh (SEML) to expand Indonesia's geothermal power resources.
This involves the expansion of an existing geothermal facility at Muara Laboh in West Sumatra and providing support in the construction, operation, and maintenance of a new geothermal power plant with an approximate capacity of 83 MW.
Joined by parallel lenders such as the Japan Bank for International Cooperation and a set of commercial banks, ADB has arranged a total financial package of US$92.6mn comprises of a US$38.8mn from the bank’s ordinary capital resources, a US$38.8mn syndicated ADB B loan from Sumitomo Mitsui Banking Corporation with ADB acting as the lender on record, and a US$15mn concessional loan from the Australian Climate Finance Partnership (ACFP).
Besides posessing the world's largest geothermal energy reserves, Indonesia utilises only a fraction of its total potential which is estimated at 23.1 GW. This is the government's motive for prioritising the development of the region's geothermal power plants.
“Investment in geothermal power can be challenging, making the support of ACFP and the Government of Australia vital to mitigate risks and deliver a project that helps Indonesia to meet its clean energy targets and deliver affordable electricity,” said ADB country director for Indonesia, Jiro Tominaga. “This project will help to reduce greenhouse gas emissions and promote sustainable energy solutions that will enhance the country's long-term energy security. It is critical for the private and public sector to work together in advancing geothermal development.”
SEML president director, Nisriyanto conveyed his appreciation to ADB for its continued support in harnessing Indonesia's vast geothermal potentail. "This project not only strengthens our renewable energy portfolio but also contributes to the local economy by creating jobs and fostering community development,” stated Nisriyanto.