The Asian Development Bank (ADB) recently signed a $109 million financing package for the Muara Laboh geothermal power generation project in western Indonesia.
According to the ADB, the financing is part of the bank’s efforts to scale up private sector-led infrastructure development in Asia and the Pacific and boost support for clean energy.
The project will be one of the first transactions to receive funding from ADB’s new Leading Asia’s Private Infrastructure Fund (LEAP), the bank said. The fund is capitalized by $1.5 billion in equity from Japan International Cooperation Agency, and is managed by ADB’s Private Sector Operations Department.
“This project demonstrates Indonesia’s commitment to meet increasing demand for electricity and support the development of renewable energy,” Yuichiro Yoi, senior investment specialist in ADB’s Private Sector Operations Department, said. “This transaction proves that the private sector will play a critical role in helping the country achieve both of these targets.”
On completion, the Muara Laboh geothermal facilities, located in West Sumatra, will generate 80 MW of electricity. Indonesia contains about 40 percent of the world’s geothermal reserves, making it an important resource for the country to achieve its commitments to reduce carbon dioxide emissions by 29 perent by 2030.
The assistance is funded by a $70 million loan from ADB’s own capital and a $19 million participation from the Clean Technology Fund (CTF).
The project company, PT Supreme Energy Muara Laboh, is a joint venture of the Indonesian geothermal power developer, PT Supreme Energy; the Japanese trading and investment company, Sumitomo Corporation; and global energy firm ENGIE.
Lead image credit: udeyismail | Flickr