ADB to fund geothermal power project in Indonesia

29 January 2017 (Last Updated January 29th, 2017 18:30)

The Asian Development Bank (ADB) has agreed to provide $109m for the Muara Laboh geothermal power generation project in western Indonesia.

ADB to fund geothermal power project in Indonesia

The Asian Development Bank (ADB) has agreed to provide $109m for the Muara Laboh geothermal power generation project in western Indonesia.

Approved last December, the funding is part of ADB’s strategy to boost private sector-led infrastructure development in Asia and the Pacific, as well as extend its support for clean energy.

The funding for the project has been provided by ADB’s newly established Leading Asia’s Private Infrastructure Fund (LEAP).

Muara Laboh geothermal power generation project is reported to be one of the first projects to receive funding through LEAP.

LEAP is capitalised by $1.5bn in equity from Japan International Cooperation Agency (JICA), and is managed by ADB's Private Sector Operations Department.

ADB private sector operations department senior investment specialist Yuichiro Yoi said: “This project demonstrates Indonesia’s commitment to meet increasing demand for electricity and support the development of renewable energy.

"This project demonstrates Indonesia’s commitment to meet increasing demand for electricity and support the development of renewable energy."

“This transaction proves that the private sector will play a critical role in helping the country achieve both of these targets.”

The Muara Laboh geothermal facility is located in West Sumatra. Upon completion, the project is expected to generate 80MW of electricity.

Indonesia is estimated to hold approximately 40% of the world’s geothermal reserves, making it an important resource for the country, which aims to reduce carbon dioxide emissions by 29% by 2030.

The project will be carried out by PT Supreme Energy Muara Laboh, a joint venture (JV) between the Indonesian geothermal power developer PT Supreme Energy, Sumitomo Corporation, and global energy company ENGIE.


Image: ADB to fund Muara Laboh geothermal power generation project in Indonesia. Photo: courtesy of Asian Development Bank.