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Five projects of up to 370 MW to profit from World Bank funding in Indonesia

Drill site at Muara Laboh project, West Java/ Indonesia (source: ENGIE)
Alexander Richter 4 Jan 2018

The government of Indonesia hopes to immediately use loans by the World Bank for five geothermal projects with a combined potential power generation capacity of more than 370 MW.

The Indonesian Ministry of Energy and Mineral Resources (ESDM) hopes to immediately use the loan funds disbursed by the World Bank through the Ministry of Finance for the development of Renewable Energy (EBT) this year. No half-hearted amount of funds prepared by the World Bank reached US $ 600 million.

Yunus Saefulhak, Director of Geothermal of the Directorate General of Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources, said the World Bank’s funds are mostly used for geothermal exploration purposes. The World Bank has previously committed to lend US $ 325 million, but the number has increased.

“It has been diannounce US $ 325 million that will be poured for geothermal exploration activities. But during the discussions with the World Bank here, there is another soft loan, bringing the total to US $ 600 million for geothermal exploration activities, “Yunus told World Energy in Jakarta recently.

According to Yunus, the World Bank’s lending scheme is that developers can apply for low interest loans. PT Sarana Multi Infrastruktur which will be responsible for disbursing the assistance in the form of the loan.

“The soft loan mechanism, as presented by Mr. Dirjen (EBTKE), to develop EBT, in order to be competitive. The only way we should use soft loan, 1.5% interest rate from World Bank. It’s very small, “he said.

Five Geothermal Working Areas (WKP) that have been included in the list of ESDM Ministry to be developed by utilizing the loan from the World Bank. The five WKPs include WKP Wae sano in East Nusa Tenggara with estimated 30 megawatt (MW) reserves, Jae lolo in North Maluku at 75 MW, Bonjol in West Sumatra with estimated reserves of 200 MW, Bituang in South Sulawesi, 38 MW of estimated reserves, as well as Nage in NTT 30 MW unexpected backup.

The proposal, said Yunus, has been submitted to the Ministry of Finance to be followed up by the Fiscal Policy Office (BKF) through the Fiscal Financing and Risk Management Center together with the World Bank.

“Five areas have been proposed by the Minister of Energy and Mineral Resources to the Finance Minister for the addition of data for exploration,” said Yunus.

When it has been disbursed later geothermal developers can apply directly to PT SMI to conduct exploration activities with interest rate or low interest rate. Later distribution and progress of the implementation of activities will be supervised by a committee formed consisting of Directorate General of EBTKE, Fiscal Risk Management Center and PT SMI.

“All business entities, whether private or state-owned, have the right to apply for loans to SMI to conduct exploration activities with low interest rates. The mechanism is normal. It will be reviewed by the committee, because the committee should be responsible for the funds issued from the World Bank, “said Yunus. (RI)

Source: Dunia Energi