Indonesian government injected fresh capital Rp700 billion (US$50 million) to state firm PT Geo Dipa Energi to install two geothermal power project in Java Island during 2020 with costs US$350 million - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesian government injected fresh capital Rp700 billion (US$50 million) to state firm PT Geo Dipa Energi, said the official yesterday (09/18). The funds use to install two geothermal power project in Java Island during 2020 with costs US$350 million.

“The funds as a share of equity, including last year’ injection Rp740 billion, now we have cash Rp1.4 trillion,” the company’ president director Riki Firmandha Ibrahim told reporters on Wednesday at the finance ministry office, Jakarta.

The other funds, he said will obtain from bank or multilateral agency’ loans. He explained, Dieng and Patuha geothermal projects have capability to produce 400 megawatts (MW), each. Currently, the two projects has installed capacity 60 MW, respectively.

“We want to install again with the same capacity at the two wells to reach the government’ targets produce 150 MW by 2023. To that, we plans to drill again in July 2020. In 2023, we hope it will be finished,” said Ibrahim.

Beside the two projects, currently, he elaborated, there are potential three new wells in five locations at eastern Indonesia. The site located in Waisano and Nage, East Nusa Tenggara; Jenolo in Halmahera, North Maluku; and Bituang in Southeast Sulawesi.

Others, he said, still waiting for government approvals. The three wells have potential resources of 30 MW.

Government Drilling

According to director of state assets at the finance ministry, Meirijal Nur, Geo Dipa, PT Sarana Multi Infrastruktur (SMI) and PT Penjamin Infrastruktur Indonesia (PII) has obligation to run the “government drilling program”. Through the program, the government wants to help the investors to invest in Indonesia’ geothermal projects.

Jointly, the third parties will explore the potential geothermal projects around the archipelago starting an early process to obtained proven resources. So far, he adds, not many investors are interested in geothermal projects because the exploration costs very expensive.

“That’s why the government take over the position. We and World bank has an agreement to run the Geothermal Resource Risk Mitigation (GREM) project in the form of soft loans to run the government drilling program,” said Nur.

Based on World Bank data, GREM project need costs $465 million and ready to disburse if Indonesia needed. The official added, combined with SMI loans, guaranteed by PII and implemented by Geo Dipa it will help to realize the program.

He stated, “After proven we will be offered to investors, both domestic and foreign, including Geo Dipa.”

Indonesia is committed to providing clean energy that is able to reduce gas emissions by 29 percent in 2030. The government is targeting geothermal energy to contribute 7,241.5 MW in 2025 to support the achievement of new and renewable energy by 23 percent.

In addition to Geo Dipa, the government has assigned two state-owned enterprises, PT Pertamina and PT Perusahaan Listrik Negara (PLN) to explore new and renewable energy in the country. At present, the total installed capacity of the three companies around 744.5 MW or 38.2 percent of the total installed capacity.

Geo Dipa itself has completed and operates the Patuha 1 Geothermal Electricity Project with an installed capacity of 735 MW. The company is currently developing Candradimuka, Umbul Telomoyo Temple, and Arjuno Welirang in Central Java.

The Asian Development Bank (ADB) estimates that the project requires US$475 million and to be funded from company equity and a soft loan from the agency.

The groundbreaking of the project was carried out by finance minister Sri Mulyani Indrawati in April 2019 and is expected to start operating in 2023.

US$1: Rp14,000

by Linda Silaen, Email: theinsiderstories@gmail.com