Geothermal Funding to Support Development in Eastern Indonesia

The World Bank last week approved $55.25 million in funding to support the Geothermal Energy Upstream Development Project in Indonesia, which aims to facilitate investment in geothermal power generation in the country.

About 30 million Indonesians — or 12 percent of the population — lack access to modern and reliable electricity. 

“The [Geothermal Energy Upstream Development Project] has a special emphasis on the eastern part of Indonesia, where the percentage of families lacking access to modern and reliable electricity remains very high,” said World Bank Senior Energy Specialist Peter Johansen in a Feb. 9 statement.

The funding has two components with different objectives, according to the World Bank. The Clean Technology Fund (CTF) is contributing $49 million to support infrastructure development and exploration drilling. The Global Environment Facility (GEF) will provide an additional $6.25 million to support technical assistance aimed at building capacity in geothermal exploration, including safeguards for due diligence. The Ministry of Finance and PT. Sarana Multi Infrastruktur, a state-owned infrastructure financing company, will match the CTF funding for the project.

Geothermal power is the second-largest renewable energy resource in Indonesia after hydropower and a clean alternative to coal-fired power generation. 

“Insufficient energy holds back Indonesia’s growth potential and limits the future opportunities of millions of Indonesians. These grants will help Indonesia develop its abundant geothermal power potential,” said Rodrigo Chaves, World Bank Country Director for Indonesia. “The World Bank fully supports the government’s efforts to achieve 100 percent access to modern, reliable electricity as quickly as possible.”

The World Bank’s support to the development of geothermal power in Indonesia is part of the World Bank Group’s Country Partnership Framework for Indonesia, which focuses on government priorities that have potentially transformational impact. 

Lead image credit: Starco | Flickr

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