Investing in Indonesia's Geothermal

World Bank approves $55m grant for geothermal power development in Indonesia

By Tabita Diela
Tuesday, February 14, 2017

The World Bank approved $55.25 million in grants on Thursday (09/02) to support upstream geothermal energy development projects in Indonesia as part of efforts to promote the use of renewable sources and expand access to power in the eastern part of the archipelago.

"Insufficient energy holds back Indonesia's growth potential and limits the future opportunities of millions of Indonesians," Rodrigo Chaves, World Bank country director for Indonesia, said in a statement on Friday.

"The World Bank fully supports the government's efforts to achieve100 percent access to modern, reliable electricity as quickly as possible."

Data from the Ministry of Energy and Mineral Resources show that the country's electrification ratio – or the percentage of Indonesian households connected to the national power grid – is expected to reach 90.35 percent last year, compared with 88.3 percent in 2015.

Energy and Mineral Resources Minister Ignasius Jonan said electricity has yet to reach 2,500 villages in the archipelago.

The grant has two components with different objectives, according to the statement. The Clean Technology Fund will contribute $49 million to support infrastructure development and exploration drilling, while the Global Environment Facility is set to contribute $6.25 million for technical assistance support.

The Ministry of Finance and Sarana Multi Infrastruktur, a state-owned infrastructure financing company, will match the Clean Technology Fund, doubling the funding for geothermal projects, the statement said.

"These grants will help Indonesia develop its abundant geothermal power potential," Chaves said.

The World Bank's support for geothermal power development in Indonesia is part of a partnership framework that focuses on the government's priorities with great impact.

Geothermal is one of the renewable energy resources the government projects will constitute 23 percent of Indonesia's primary energy mix by 2025. It currently only contributes 7 percent.

This article first appeared on the Jakarta Globe website on February 10, 2017.

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