Indonesia: GE Finance provides US$50 million loan to Star Energy

Alexander Richter 4 Nov 2009

GE Energy Financial Services provides US $50 million loan to Indonesia’s biggest geothermal power producer, 220 MW Wayang Windu plant of Star Energy.

In a release by the company, “GE (NYSE: GE) unit GE Energy Financial Services announced it has loaned US $50 million to Indonesia’s biggest geothermal power producer, a 220-megawatt emissions-free plant set in a volcanic region of tea and quinine plantations. The loan for the Wayang Windu plant — near the town of Pangalengan, 200 kms southeast of Jakarta – represents the first geothermal power investment by GE Energy Financial Services outside the United States, as well as the continued execution of its global growth strategy.

GE Energy Financial Services made the loan to a subsidiary of Star Energy, a privately held Indonesian energy developer, as it completed a turbine and steam feed project to double the plant’s power output. Further expansion is planned to help meet the power needs of Java, Madura and Bali. The power is sold into the state-owned power utility PLN’s West Java high voltage grid. GE Energy Financial Services joined a $282 million project finance loan that closed in 2007, with Standard Chartered Bank serving as the mandated lead arranger and facility agent.

“The Wayang Windu project is ideal as GE Energy Financial Services’ first investment in the Indonesian energy sector in a decade,” said James Berner, the Singapore-based head of Asia at GE Energy Financial Services. “It illustrates two strategic themes for GE: the rise of Indonesia and the growth of renewable energy in our ecomagination program.”

The plant, named for Mt. Wayang and Mt. Windu in the highlands of West Java, provides clean, baseload power, avoiding 1.2 million tonnes per year of greenhouse gas emissions (CO2 equivalent).

Wayang Windu taps into naturally occurring underground pockets of steam and hot water, with wells as deep as 3 kms. The geothermal fluid is brought to the surface, where it passes at high pressure through a conventional steam turbine generator to produce electricity and is re-injected into the geologic formation. Positioned on the volcanic “Ring of Fire” that circles the Pacific Ocean, Indonesia hosts an abundant source of clean, sustainable geothermal energy to complement its immense hydrocarbon and coal reserves. Indonesia has one of the biggest geothermal resource potentials in the world, estimated at 27,510 megawatts, but with a total capacity of 1,052 megawatts, less than 5 percent of this potential has been developed. The government aims to install 9,500 megawatts of geothermal generating capacity by 2025, accounting for 6 percent of the country’s energy consumption.

GE has invested $1.2 billion in Indonesia, where it began operations in 1940.”

Source:Company release via Welt