Indonesia’s Geo Dipa Energi Eyes US$300M to Build Geothermal Power Plants
Groundbreaking Geothermal Power Plant of the PT Geo Dipa Energi at the Ministry of Finance Office in Jakarta on Thursday (04/25). Photo by TheInsiderStories.com

JAKARTA (TheInsiderStories) – Indonesia’s geothermal power producer PT Geo Dipa Energi resumed the construction of 2 units of geothermal power plants with an investment of US$300 million, the company said on Thursday (04/25). The two power plants are Dieng 2 power plant in the Central Java and Patuha 2 power plant project in Bandung, West Java.

According to President Director Riki Firmandha Ibrahim, the construction will be planned for completion in 2023 with each of them receiving the same financing portion of $150 million, with a capacity of 60 megawatts (MW).

“We are targeting to be completed as soon as possible especially when we see the support of foreign investors very attractive, including the Asian Development Bank,” he said when opening the company’ groundbreaking event at the Ministry of Finance office in Jakarta.

Ibrahim said that the company’ performance which is a joint venture between state-owned energy producer, PT Pertamina under the auspices of the Ministry of Finance was very positive. Its targeted that revenues will increase in line with the accumulated increase of 182 percent.

“In 2017, company revenues have contributed 20 percent to gross revenues, while in 2018 contributed 22 percent to the net income from the total national electricity production,” he said.

Ibrahim added, financing the construction of the two power plants with a capacity of 270 MW also came from loans to lower interest multilateral banks.

“Because the price of electricity in Indonesia is still high, we are looking for smaller interest banks, including ADB,” he added.

Regarding the negotiation of electricity tariffs that will be imposed, Ibrahim said that his party had signed a cooperation agreement with State Electricity PT Perusahaan Listrik Negara (PLN) of around $8.2 cents per kilowatt hours (KWh).

Moreover, the company continues to expand to build the next unit generator. By conducting drilling exploration, the company needs funds of $125 million to $140 million for 20 wells.

Finance Minister Sri Mulyani Indrawati Indrawati appreciated the achievements and visions of the company’ development because it is in line with the government’s electrification project which is targeted to reach 35,000 MW by 2045.

Indonesia must achieve a 100 percent electrification ratio, but this requires the cooperation of all parties. And also need to pay attention to the Paris agreement (Law Number 16 Year 2016) in combating climate change, in addition to meeting domestic energy needs.

The former World Bank staff said the government targets national electricity production of 23 percent from mix energy, which is from the composition of new and renewable energy. One of the biggest potentials, according to her, comes from geothermal energy.

“Indonesia has great potential to develop this energy, even we have the greatest potential in the world,” she said.

But the hattrick-best Asian Minister of Finance underlined, Indonesia still needs the right policy related to the utilization of geothermal energy to create domestic energy security.

During his term of office 15 years ago, Indrawati had urged the government ministries and institutions to agree in detail to discuss the solutions related to key issues that are the challenge of developing renewable energy in Indonesia.

“There are several policies that are still being discussed, including the issue of exploration risk, the environment, PLN as a single player, and the search for efficient and environmentally friendly technologies,” she said.

She hoped, with the collaboration as already signed on Thursday, the company can utilize the geothermal potential to reach 1,000 MW in the future.

Meanwhile, Minister of Energy and Mineral Resources Ignasius Jonan targeting the geothermal energy in 2025 by 11 percent from the current 5 percent. Likewise with renewable electricity energy production capacity, government targets to reach 6,500 MW.

“In 2018, it has reached 115 MW or 6 percent of electricity production. Even though Geo Dipa Energi’ capacity can reach 1,200 MW,” he said in a written statement.

On the other hand, Asian Development Bank (ADB) Director for Indonesia Andrew Jeffries said that the main objective of this development is to sustain energy supply in the future, to support the supply of renewable energy and reduce carbon emissions.

“Indonesia has great potential with a large area. There are still many sources that have not been well explored and utilized,” he said.

In addition to groundbreaking, the company also signed four memorandum of understanding with several related parties, including government institution, ADB, PT Penjamin Infra Indonesia and PT Sarana Multi Infrastruktur as a form of cooperation in financing and guaranteeing project development.

Written by Daniel Deha, Email: daniel@theinsiderstories.com

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