ADB to grant $300m loan for GDE’s 110MW geothermal power project in Indonesia

The Asian Development Bank (ADB) has sanctioned a $300 million loan to Indonesian state-owned company Geo Dipa Energi (GDE) for expanding its geothermal power generation capacity by 110MW in Java Island through the construction and commissioning of two geothermal power plants.

Additionally, the Asian Development Bank will manage a $35 million loan from the Clean Technology Fund for the geothermal power project in Indonesia.

One of the geothermal plants will be built in Dieng in Central Java. while the other will be located at Patuha in West Java.

Winfried F. Wicklein – Asian Development Bank Country Director for Indonesia said: “ADB’s geothermal project will help Indonesia combat climate change and make its electricity system more sustainable, reliable, and efficient. It will also help businesses and consumers access affordable, reliable, and modern energy.

“Our support is aligned with Indonesia’s long-term goals for economic growth and energy, including maximizing the use of indigenous energy resources, diversifying the fuel mix, and ensuring environmental sustainability.”

ADB to grant $300m loan for GDE’s 110MW geothermal power project in Indonesia. Photo courtesy of AndreaADB/Wikipedia.org.

Once operational, the geothermal plants will increase the capacity of Geo Dipa Energi to plan and undertake projects and execute government-supported drilling, which aims to draw investment from the private sector to develop new geothermal areas.

Riki Ibrahim – President Director of Geo Dipa Energi said: “The project, recognized as a National Strategic Project by the government, will provide environmentally friendly base-load electricity to the Java–Bali electricity grid, reducing CO2 emissions by more than 700,000 tons per year.

“The project will build critical geothermal experience in Indonesia and contribute to the government’s efforts to attract private-sector investment in the sector by reducing early-stage project development risk.”

According to the Asian Development Bank, Indonesia has the largest geothermal potential in the world, with an estimated 29GW capacity, and also has the world’s second-largest installed geothermal capacity of 2.1GW. The bank has supported the country’s geothermal sector by involving itself in the Muara Laboh, Rantau Dedap, and Sarulla projects through its private sector finance operations.