The Asian Development Bank (ADB) signed a US$92.6 million (Rp1.5 trillion) financing agreement with PT Supreme Energy Muara Laboh (SEML) for the development of Indonesia’s geothermal power resources.
ADB’s total financing package of US$92.6 million comprises of US$38.8 million from the bank’s ordinary capital resources; a US$38.8 million syndicated ADB B loan from Sumitomo Mitsui Banking Corporation with ADB acting as the lender of record; and a US$15 million concessional loan from the Australian Climate Finance Partnership (ACFP).
The ACFP is a concessional blended financing facility managed by ADB and funded by the Government of Australia. It catalyzes financing for private sector climate adaptation and mitigation investments in the Pacific and Southeast Asia, and addresses market and demand gaps by de-risking high-impact development projects and bringing them to the market.
Meanwhile, SEML is a special purpose business entity established to explore and develop geothermal resources in Indonesia. SEML is a joint venture between PT Supreme Energy, an Indonesian geothermal power provider; and INPEX Corporation, the largest oil and gas exploration and production company from Japan.
Through the financing, geothermal facilities in Muara Laboh, West Sumatra will be expanded. In addition, the financing will be used to support the construction, operation, and maintenance of a new geothermal power plant with a capacity of around 83 megawatts (MW).
ADB as the lead money bank structuring the transaction. It will then mobilize private commercial capital in the project. It is also joining forces with parallel lenders including the Japan Bank for International Cooperation and a number of commercial banks guaranteed by Nippon Export and Investment Insurance.
“Investment in geothermal power can be challenging, so support from the ACFP and the Australian Government is critical to reducing risks and implementing projects that help Indonesia meet its clean energy targets and provide affordable electricity,” Jiro Tominaga, ADB Country Director for Indonesia, said as quoted from the official ADB website, on Tuesday, January 14, 2025.
According to Jiro, this project will help reduce greenhouse gas emissions and promote sustainable energy solutions that will improve Indonesia’s long-term energy security.
So far, ADB has financed four geothermal transactions in Indonesia, demonstrating ADB’s strong commitment to the geothermal sector in Indonesia. These projects include Muara Laboh Phase 1, Rantau Dedap, and the Sarulla geothermal power plant project.
Nisriyanto, SEML President Director, cited that this project not only strengthens SEML’s renewable energy portfolio, but also contributes to the local economy by creating jobs and encouraging community development.
