Indonesia to invest $367M in geothermal power plants

The Indonesian government will spend $367 million or Rp 3.4 trillion coming from its State Investment Agency to construct geothermal power plants.

Soritaon Siregar, the chairman of the State Investment Agency, which has been tasked with funding major infrastructure projects, said that the agency would provide loans of Rp 2 trillion to companies to build geothermal power plants and another Rp 1.4 trillion to firms building micro-hydropower plants.

“We will sign three power projects in the immediate term,” Saritaon said in Jakarta after the signing of a memorandum of understanding with state utility company Perusahaan Listrik Negara.

The government has been encouraging PLN and independent power producers to invest in “clean” power.

Soritaon said his office had received several proposals from companies seeking loans from the State Investment Agency for such projects.

Pertamina Geothermal Energy, the geothermal unit of state oil and gas company Pertamina, plans to build two geothermal power plants with a combined capacity of 110 megawatts in Ulubelu, Lampung, this year. The construction of the plants, which started earlier this year, is due to be completed by 2014, said Slamet Riadhy, the president director of PGE. The two plants will cost $270 million combined.

The company’s planned geothermal power plants form a model that will be rolled out across the country. PGE runs a geothermal power project in Muara Enim, South Sumatra. Its other projects include a plan to build a geothermal power plant in Karaha Bodas, West Java.

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