New funding schemes in Jakarta to encourage geothermal exploration
Drilling rig on site at Sorik Marapi, Indonesia (source: KS Orka)
Parker O'Halloran
31 May 2017
The Finance Ministry in Jakarta has taken steps to streamline funding for new geothermal project through the state-owned state-owned infrastructure financing company PT Sarana Multi Infrastrukture.
The Finance Ministry in Jakarta has taken steps to streamline funding for new geothermal project through the state-owned state-owned infrastructure financing company PT Sarana Multi Infrastrukture (SMI). SMI will now be able to supply funds to be used for loans, capital, and exploration activities to compile data for prior to geothermal drilling. As mentioned in previous articles detailing The World Bank’s ESMAT report, this is riskiest and most expensive part of geothermal development.
For loans, SMI will supply the funds based on a business corporation scheme with SMI. Moreover, the funds needed for geothermal reconnaissance data and information will be based on assignments by the Finance Ministry,” according to a press statement.
SMI’s funding is expected to mitigate the risks that come with the large investments needed during the exploration stage, which has stymied prospective investors in the past. The government hopes the funds will help stimulate new discoveries, which will eventually increase the use of geothermal for electricity generation.
Indonesia is estimated to have 29 gigawatts (GW) of geothermal potential. However, it still operates geothermal power plants with an installed capacity of 1,698.5 megawatts (MW), but aims to increase it to 1,858.5 MW by the end of the year. The Indonesian government is planning to generate up to 7,200 MW by 2025.
Source: Fedina S. Sundaryani. The Jarkata Post. “New regulation opens way for geothermal sector’s infrastructure financing” May 31, 2017.
