The Asian Development Bank is to provide a loan of approximately $175.3 million to PT Supreme Energy Rantau Dedap to help finance the second phase of SERD’s geothermal power project in South Sumatra Province, Indonesia.
Indonesia, courtesy of Asian Development Bank (ADB)
The deal is part of ADB’s continued effort to scale up private sector-led infrastructure development and support clean energy investments in the Asia and Pacific region.
As part of the financing, ADB will also administer an additional loan provided by the Clean Technology Fund which is a rollover amount from an existing CTF facility for the first phase of the project. The CTF loan for the first phase helped to confirm the commercial resource size and allow the project to proceed to financing of construction and operations.
“This innovative, phased financing proves that adequate risk allocation allows the private sector to successfully develop geothermal projects in Indonesia,” said Yuichiro Yoi, Unit Head for Indonesia at ADB’s Private Sector Operations Department.
Around 40 percent of the world’s geothermal reserves are located in Indonesia, amounting to an estimated 29,000 MW of potential power generation. These reserves form an important resource that the country can draw upon in order to achieve its commitments to reduce carbon dioxide emissions by 29 percent by 2030. The Rantau Dedap geothermal facilities are expected to generate more than 90 MW of electricity, powering up to 130,000 homes, creating jobs and avoiding over 400,000 tons of carbon dioxide emissions every year by 2021.