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ADB provides $175.3m to support SERD’s geothermal project in Indonesia

EBR Staff Writer Published 26 March 2018

The Asian Development Bank (ADB) will provide $175.3m loan to PT Supreme Energy Rantau Dedap (SERD) to support development of the second phase of the company's geothermal power project in South Sumatra Province, Indonesia.

The bank has signed the loan agreement for the 90MW Rantau Dedap project, which is being developed by SERD, a joint venture between Indonesian company PT Supreme Energy, Japan’s Marubeni and Tohoku Electric Power and French utility Engie.

Planned to be commissioned by 2021, the Rantau Dedap geothermal facilities will have capacity to power up to 130,000 homes, create jobs, and avoid over 400,000 tons of CO2 emissions annually.

The Rantau Dedap project also secured financing from the Japan Bank for International Cooperation and three commercial banks under a guarantee from Nippon Export and Investment Insurance, worth approximately $188.8m and $125.9m, respectively.

ADB Private Sector Operations Department Indonesia unit head Yuichiro Yoi said: “This innovative, phased financing proves that adequate risk allocation allows the private sector to successfully develop geothermal projects in Indonesia.

“The project also demonstrates Indonesia’s strong commitment to develop renewable energy sources to diversify its energy mix and reduce its carbon emissions.”

Additionally, ADB will administer extra financing provided by the Clean Technology Fund (CTF). This financing is a rollover amount from an existing CTF facility for the first phase of the project.

The deal is part of the bank’s efforts to scale up private sector-led infrastructure development and support clean energy investments in the Asia and Pacific region.

Earlier, the lender offered $350m in financial support for the development of 320MW Sarulla Geothermal Power Development Project and the 80MW Muara Laboh Geothermal Power Generation Project in Indonesia. 

With a total potential of about 29,000MW, Indonesia is claimed to hold about 40% of the world’s geothermal reserves.

The country’s geothermal resource is expected to contribute to its efforts to reduce carbon dioxide emissions by 29% by 2030.