ADB OKs $92.6m financing deal to develop Indonesia’s geothermal energy

This will fund expansion of an existing plant, and the development of a new one.

The Asian Development Bank (ADB) has signed a $92.6m financing agreement with PT Supreme Energy Muara Laboh (SEML) to enhance Indonesia’s geothermal power capacity.

In a statement, the ADB said the financing will help expand a geothermal facility at Muara Laboh in West Sumatra, and support the construction, operation, and maintenance of a new power plant with an approximate capacity of 83 megawatts.

ADB sourced $38.8m of the total amount from its ordinary capital resources, another $38.8m from a syndicated ADB B loan from Sumitomo Mitsui Banking Corporation with ADB acting as the lender on record, and the remaining $15m from a concessional loan from the Australian Climate Finance Partnership.

The bank’s parallel lenders include the Japan Bank for International Cooperation and a set of commercial banks under guarantee from Nippon Export and Investment Insurance.

Indonesia has the world’s largest geothermal energy reserves, estimated at 23.1 gigawatts, but it utilises only a fraction.

ADB has implemented efforts to support geothermal projects in the country. Since 2013, it has helped finance four transactions, and assisted in private sector finance operations for projects including Muara Laboh Stage 1, Rantau Dedap, and the Sarulla geothermal power project.