US Announces Investment For Renewable Energy Of Up To IDR 2 Trillion

Renewable Energy (Photo: dock. Antara)

JAKARTA - The US Development Finance Corporation (DFC) announced a new commitment worth US$126 million (around Rp2 trillion) for Indonesian electricity company, PT Medco Cahaya Geothermal.

According to a written statement from the US Embassy, this commitment is an investment that will help strengthen Indonesia's energy security and contribute to achieving economic goals together with the US.

Citing Antara, it was stated that DFC's commitment to the company was coordinated with the Indonesian infrastructure bank, PT Sarana Multi Infrastruktur (SMI), which is the lender who finances the current project.

This will support the development and operation of the new Phase I power plant with a capacity of 31 MW, Inspector General Geothermal, which will increase the number of renewable power plants in East Java.

In addition, the development of Phase 1 of the Geothermal Inspector General will also provide the capacity of the basic low-carbon electric load generation that is needed for the Java-Bali electricity grid, the largest electricity system in Indonesia.

"The Ijen Geothermal Power Plant is an important part of Indonesia's ambitious strategy for energy transition," said DFC Deputy Chief Executive Officer Nisha Biswal.

"This project also strengthens our common goals through the US-Indonesian Comprehensive Strategic Partnership, which will increase economic security and energy for both countries," he added.

The project is the latest example of Indonesia's involvement with the US Government in several important sectors, including infrastructure and renewable energy financing, and support for small businesses.

The project also aims to advance Indonesia's top priorities in the country and throughout the region. In November 2023, DFC announced a new investment worth US$131 million (around Rp2.1 trillion) for small businesses and women's economic empowerment in Indonesia.

The DFC aims to advance investment in the private sector in Indonesia and support the US-Indonesian Comprehensive Strategic Partnership which is also in line with several US Government priorities.

Some of these priorities are the Indo-Pacific Strategy, the Indo-Pacific Economic Framework, and Partnerships for Global Infrastructure and Investment, as well as Indonesian JETP.