The Asian Development Bank – ADB has gone on to approve a loan worth $180 million to support PT Geo Dipa Energi – Persero so as to expand the geothermal capacity of Indonesia.
As per the press release from ADB, the financing is going to be used to complete construction and operational testing of a couple of geothermal power units based on Java Island, each having a capacity of 55 megawatts.
Jiro Tominaga, the ADB country director for Indonesia, said that the project is sure to offer environmentally friendly baseload electricity across the Java-Bali grid and simultaneously is also going to decrease the carbon emissions by over 550,000 tons of CO₂ per year.
He has pledged to close collaboration in order to enhance the geothermal capacity of Indonesia and at the same time speed up the shift toward a much cleaner and, of course, more resilient future of energy.
Tominaga added that Indonesia happens to hold the largest geothermal potential in the world at 29 gigawatts, having an installed capacity of 2.1 gigawatts – which by the way, is the second largest across the world.
But the geothermal development that is seen in the country still faces barriers such as long project durations, high costs, and also some major exploration risks.
The project that was launched in 2020 not only happens to support exploration and power generation but at the same time, it also strengthens the capacity of Geo Dipo in terms of project planning, its execution, and also government-supported drilling in order to attract worthy private investment.
In the past, in 2023, ADB went ahead and processed its first additional financing for the project, which was a $10 million grant coming from the Japan Fund for Joint Crediting Mechanism – JFJCM so as to install advanced technology at the Patuha Unit 2 power plant.
