JAKARTA - The Asian Development Bank (ADB) has approved a loan of 180 million US dollars or Rp. 2.99 trillion (exchange rate of Rp. 16,611 per US Dollar) as the second additional financing to support PT Geo Dipa Energy (GDE), an Indonesian state-owned company in order to further increase geothermal power plants.
Director of ADB for Indonesia, Jiro Tominaga said that this additional funding will be focused on supporting project completion amid increasing costs and maintaining the goal of net energy and the national climate.
"ADB is happy to partner with the Government of Indonesia in advancing the sustainable energy transition in this country," he said in his statement, Friday, October 31.
Meanwhile, the geothermal power plant project supports the construction and operation of two geothermal power plants with a capacity of 55 megawatts each on the island of Java.
This project will provide environmentally friendly basic load electricity for the Java-Bali electricity grid, reducing CO2 emissions by more than 550,000 tons per year.
He added that PT Geo Dipa Energy played a role in the catalyst in pushing for the next phase of geothermal development.
"We hope to continue this close collaboration to expand Indonesia's geothermal capacity and accelerate the transition to a cleaner and more resilient energy future," he said.
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Despite having the largest geothermal potential in the world (29 gigawatts) and the second largest installed capacity (2.1 gigawatts), Indonesia's geothermal development is still slow due to high costs, long duration, and high exploration risk.
Meanwhile, projects approved in 2020, support GDE in exploration, development, and geothermal power plants while strengthening their capacity to plan and implement projects and carry out government-backed drilling to attract private investment.
In 2023, ADB processed its first additional financing for the project, a $10 million grant from the Japanese Fund for the Joint Credit Mechanism (JFJCM), to incorporate advanced technology at the Patuha unit 2 power plant.
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