10 February 2017

World Bank to support geothermal energy project in Indonesia

The World Bank will give US$55.25 million in grants to support the Geothermal Energy Upstream Development Project in Indonesia, which aims to facilitate investment in geothermal power generation in the country.

The Clean Technology Fund (CTF) is contributing US$49 million to support infrastructure development and exploration drilling. The Global Environment Facility (GEF) contributes an additional US$6.25 million to support technical assistance aimed at building capacity in geothermal exploration, including safeguards for 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 – 12% 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,” said Rodrigo Chaves, World Bank Country Director for Indonesia. “The World Bank fully supports the government’s efforts to achieve100% access to modern, reliable electricity as quickly as possible.”

The Geothermal Energy Upstream Development Project will also support Indonesia’s continued efforts to shift to a greener energy development path and reach its target of increasing the share of new and renewable energy in the primary energy mix to 23% by 2025. Expanding access more equitably across the vast archipelago is another key objective for the project.

“The project has a special emphasis on the eastern part of Indonesia, where the percentage of families lacking access to modern and reliable electricity remains very high,” said World Bank Senior Energy Specialist Peter Johansen.

The World Bank’s support to the development of geothermal power in Indonesia is a key component of the World Bank Group’s Country Partnership Framework for Indonesia, which focuses on government priorities that have potentially transformational impact.