PT MCG secures financing for Ijen geothermal project, Indonesia

Kawah Ijen volcanic crater, East Java, Indonesia (source: V. Epiney / flickr, Creative Commons)

Carlo Cariaga 12 Jan 2023

PT Medco Cahaya Geothermal (MCG) has signed a Financing Agreement with PT Sarana Multi Infrastruktur (Persero) (SMI) for the development of the Blawan Ijen geothermal project in East Java, Indonesia. MCG is jointly owned by Medco Power (51%) and Ormat Technologies  (49%).

“This signing is another step to support Indonesia’s economy towards clean renewable energy and another step in Ormat’s long term plan to increase its presence in the country both as a geothermal power plant owner and as an equipment supplier,” said Ormat CEO Doron Blachar.

PT SMI is the Special Mission Vehicle under the Ministry of Finance that aims to accelerate infrastructure development in Indonesia through public-private partnerships and the mobilization of resources from financial institutions. The entity actively contributes to sustainable development in Indonesia by financing renewable energy projects as well as projects in transport, agriculture, and water security.

The Ijen power plant will be developed in stages with the first phase of the development expected to generate 34 MW in 2025. In late 2022, MCG announced receiving approval from the Ministry of Energy and Mineral Resources (MEMR) to drill four exploration wells, two reinjection wells, and one make-up well on the site. This follows the results of an exploration survey done by MCG that was concluded earlier in 2022.

“This project is a milestone to contribute Indonesia’s commitment to climate change. PT SMI also would thank USAID SINAR for their support in this project,” said SMI President Director Edwin Syahruzad.

“This signing demonstrates Medco Power’s commitment to developing clean and renewable power for Indonesia post completion of the Riau gas-fired CCPP of 275MW and Sumbawa Solar PV of 26MWp in 2022,” added Medco Power President Director Eka Satria.

Source: Ormat