The Asian Development Bank (ADB) has signed a $92.6mn financing agreement with geothermal power producer Supreme Energy Muara Laboh (SEML) to develop Indonesia's geothermal power capabilities.
The funds will go toward the expansion of a geothermal facility at Muara Laboh in West Sumatra, and the construction, operation and maintenance of a new 83MW geothermal power plant, the ADB announced on 14 January.
The support will "help Indonesia to meet its clean energy targets and deliver affordable electricity," said the ADB's country director for Indonesia, Jiro Tominaga. The project will also allow Indonesia to enhance its long-term energy security, while reducing greenhouse gas emissions.
The finance package consists of $38.8mn from the bank's ordinary capital resources, a $38.8mn "B loan" from Sumitomo Mitsui Banking, and a $15mn concessional loan from the Australian Climate Finance Partnership (ACFP).
Indonesia has the world's largest geothermal energy reserves, estimated at 23.1GW, said the ADB. But the country is still heavily reliant on fossil fuels for its energy needs, with coal accounting for 61.8pc of Indonesia's power mix in 2023, while renewables accounted for 19pc.
Indonesia's president Prabowo Subianto announced in November that Indonesia intends to retire all coal-fired power plants by 2040, and the government subsequently clarified that it is instead aiming for a coal phase-down.
But a phase-out could be possible if the country rapidly increases its share of renewables in the energy mix to 65pc, according to energy think-tank Ember. This would mean a renewable energy target higher than the government's current goal of 75GW by 2040.
