WB Approves US$55.25 Million Grant for Geothermal Power in Indonesia

Jakarta (Antara Bali) - The Board of Executive Directors of the World Bank (WB) has approved US$55.25 million in grants to support the development of an upstream geothermal energy project in Indonesia.

"The grants aim to facilitate investment in the geothermal power generation sector in the country," Rodrigo Chaves, WB Country Director for Indonesia, said in a statement in Jakarta on Friday.

The grant has two components with different objectives. The Clean Technology Fund (CTF) is contributing $49 million to support infrastructure development and exploration drilling.

The Global Environment Facility is contributing an additional $6.25 million to support technical assistance aimed at building capacity in geothermal exploration, including safeguards 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. Some 30 million Indonesians, or 12 percent of the population, lack access to modern and reliable electricity.

"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," Chaves stated.

Chaves added that the WB fully supports the government's efforts to achieve 100 percent access to modern, reliable electricity as quickly as possible.

The development of an upstream geothermal energy project will also support Indonesia's continued efforts to shift to a greener energy development path and realize its target of increasing the share of new and renewable energy in the primary energy mix to 23 percent by 2025.

Expanding access more equitably across the vast archipelago is another key objective of the project.

"The project lays special emphasis on the eastern part of Indonesia, where the percentage of families lacking access to modern and reliable electricity remains very high," WB Senior Energy Specialist Peter Johansen remarked.

The WB's support to the development of geothermal power in Indonesia is a key component of the WB Group's Country Partnership Framework for Indonesia, which focuses on government priorities that have potential for bringing about transformational impact. (WDY)