Indonesia allocates $224 million for Geothermal Drilling Fund
With the allocation of $224 million in its 2017 budget, the Indonesian government has initiated the start of a $270 million Geothermal Drilling Fund to de-risk geothermal projects and spur development.
The government of Indonesia has allocated $224 million in its budget for 2017 for a Government Drilling Fund. With that fund, geothermal exploration around the country is to be supported, as reported by the Jakarta Post.
With a total amount of $270 milllion, of which $55.25 million are coming from the World Bank in form of a loan, the fund is to boost geothermal development.
The fund will be managed by Sarana Multi Infrastruktur, the government’s infrastructure investment arm, and supervised by the Minstries of Finance and Energy. With the fund it is aimed to cover exploration risk taken by developers of geothermal resources, according to Rida Mulyana, Director General of renewable energy and energy conservation at the Ministry of Energy and Mineral Resources
With support by the fund, the government will conduct surveys of potential geothermal resources and drill exploration wells and thereby taking the exploration risk.
Taking this step, the government hopes to provide private investors and IPPs with projects that have already proven resources for development. The developer then needs to pay for the cost of exploration, which will flow back into the fund and be re-invested by the government.
It is planned to set up a Geothermal Exploration Committee with officials from the Ministry of Energy, the Geological Survey/ Agency and the Ministry of Finance, according to Yunus Saefulhak, Director for Geothermal at the Ministry of Energy. This is a joint effort by his ministry and the Ministry of Finance.
“The committee will be responsible for ensuring that the fund is used in an accountable and measurable way,” Yunus said.
Source: The Jakarta Post