Government to infuse $50m in equity to PT Geo Dipa Energi for two geothermal projects
The Indonesian government has earmarked a $50 million equity infusion into PT Geo Dipa Energi as part of a financing agreement for two geothermal projects of the company by the Asian Development Bank.
As reported last week from Jakarta, the Indonesian government has announced that it plans a State Capital Participation (PMN) of Rp. 700 billion (ca. $50 million) for PT Geo Dipa Energi (Persero). The investment is to be budgeted in the state and Expenditure Budget of the Indonesian government for 2020 and is to help fund two geothermal power projects by Geo Dipa. The investment is to support the work on the two geothermal projects of Patuha 2 and Dieng 2, planned for a start of construction in April 2020.
While the projects received funding from the Asian Development Bank (ADB), a certain portion of equity is required under the financing agreement, which is the basis for the planned equity infused into the company by the government. The funding, so Director of State Assets Separated by the Directorate General of State Finance Ministry of Finance Meirijal Nur, “will be blended to finance Dieng 2 and Patuha 2″, and is the right instrument to help Geo Dipa, (as) the two projects support the government’s goal to enlarge the portion of the use of environmentally friendly energy.”
The equity infusion was proposed directly by Geo Dipa to the Ministry of Finance, and agreed upon as it is in line with the need to develop these two geothermal projects
Meanwhile, Managing Director of Geo Dipa Riki Firmanda Ibrahim said the investment in the two projects reached a total of US$ 350 million. However, only 80 percent to 90 percent is provided by financing, so the remaining funding must be provided by the corporation.
These two projects are to add 120 MW in geothermal power generation capacity, 60 MW each and if everything goes according to plan should be completed in 2023.
“Therefore, we propose(d) an additional PMN of Rp700 billion as part of our equity portion. The plan is that 15 percent of our equity will be used to purchase pipes and casings, wellhead drilling, and next year we will enter a tender in the long item lead” He explained.
If the project is completed, the installed capacity of the Geo Dipa geothermal power plant reaches 270 MW in 2023.” At present we only have 110 MW from Dieng 1 and Patuha 1, we hope we can increase the installed capacity to 270 MW in four years. again, “he concluded.
Source: CNN Indonesia