Indonesia Invests to Power Up Geothermal Project Rollout

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Indonesian government is ready to invest $367 million seed capital for the construction of geothermal power projects that will form a model for others that will be rolled out across the country.

The money will come from PIP, the state investment agency, which has been tasked with funding major infrastructure projects. The agency will provide loans of $214 million to companies to build geothermal power plants and a further $153 million to firms building micro-hydropower plants.

PIP chairman Soritaon Siregar said, "We will sign three power projects in the immediate term." Several proposals have been received from companies seeking loans from PIP for projects. Pertamina Geothermal Energy (PGE), the geothermal unit of state oil and gas company Pertamina, plans to start building two geothermal power plants with a combined generating capacity of 100 megawatts in Ulubelu, Lampung in 2012.

The plants are scheduled to be completed in 2014 and will require an investment of $270 million said Slamet Riadhy, president director of PGE.

These plants will form the model for the countrywide project rollout. PGE operates a geothermal power project in Muara Enim, South Sumatra, and has plans to build a geothermal plant in Karaha Bodas, West Java, according to the Jakarta Globe.

The Indonesian archipelago has 17,000 islands, many of them volcanic, offering an ideal opportunity to develop the renewable power source. The country had a power generation capacity of 28,462 MW at the end of 2011. Coal-fired plants accounted for about 42.2% of the total, diesel 23.7%, hydropower 6.7% and geothermal and other renewables 5.4 %.

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