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Indonesia announcing $300m geothermal exploration program

Taman Hutan Raya Bung Hatta, Solok, West Sumatra, Indonesia (source: flickr/ Daniel Wilder, creative commons)
Alexander Richter 19 Jun 2013

Indonesia establishes $300 million exploration program open to local governments to finance early exploration work and in form of loans to private investors.

At the recent GeoPower Indonesia & Philippines event here in Jakarta, Indonesia there have been lots of discussions on development in Indonesia. While there are several suppliers exhibiting and targeting the market and there generally is optimism that things will move forward, there are though still concerns about progress in development.

There seems to be a general frustration on lack of clear regulatory guidance and assistance, e.g. with the still not finalized feed-in-tariff scheme. Some even say that the FIT in the current state is not changing much for the market.

But here at the conference the Indonesia’s Investment Agency by the Ministry of Finance has announced it has initiated a fund to finance the exploration of geothermal energy resources. The fund is expected to manage Rp 3 trillion ($302 million) this year for geothermal exploration, according to Saritaon Siregar, the agency’s chairman.

The fund can be accessed by local governments with geothermal areas to help them evaluate the potential for geothermal development.

“If exploration shows good results, the local government can put the area for bidding and investors that win can repay the exploration funds to us,” Siregar said.

The fund will also be accessible for private investors that can apply for loans for geothermal exploration.

So far no funds have been distributed.

Source: Bloomberg via The Jakarta Globe