ADB SIGNS US$92.6 MLN AGREEMENT TO EXPAND GEOTHERMAL FACILITY IN WEST SUMATRA

JAKARTA, Jan 14 (Bernama) -- The Asian Development Bank (ADB) has signed a US$92.6 million agreement with Indonesia’s PT Supreme Energy Muara Laboh to expand a geothermal facility in Muara Laboh, West Sumatra. It will support the construction, operation, and maintenance of a new 83-megawatt geothermal power plant.

ADB’s total arranged finance package of US$92.6 million comprises a US$38.8 million from the bank’s ordinary capital resources, a US$38.8 million syndicated ADB “B loan” from Sumitomo Mitsui Banking Corporation with ADB acting as the lender on record, and a US$15 million concessional loan from the Australian Climate Finance Partnership (ACFP).

PT Supreme Energy Muara Laboh is a special-purpose vehicle established to explore and develop geothermal resources in Indonesia, while ACFP is a concessional blended financing facility managed by ADB and funded by the Australian government.

ADB is the lead bank for the transaction, helping raise private capital with uncovered project risk in Indonesia’s geothermal sector, alongside lenders like the Japan Bank for International Cooperation and commercial banks supported by Nippon Export and Investment Insurance.

“This project will help to reduce greenhouse gas emissions and promote sustainable energy solutions that will enhance the country’s long-term energy security,” ADB country director for Indonesia, Jiro Tominaga stated in a statement on Tuesday.

Since 2013, ADB has used its experience to finance four geothermal projects in Indonesia, including Muara Laboh Stage 1, Rantau Dedap, and Sarulla.

With the world’s largest geothermal energy reserves at 23.1 gigawatts, Indonesia uses only a small fraction of its potential, prompting the government to prioritise the development of geothermal plants.

-- BERNAMA