The Asian Development Bank (ADB) has finalised a $92.6 million financing agreement with PT Supreme Energy Muara Laboh (SEML) to advance geothermal energy development in Indonesia. The project will expand the Muara Laboh geothermal facility in West Sumatra and establish a new power plant with an 83-megawatt (MW) capacity.
ADB’s financing package includes $38.8 million from its ordinary capital resources, a $38.8 million syndicated loan from Sumitomo Mitsui Banking Corporation, and a $15 million concessional loan from the Australian Climate Finance Partnership (ACFP). The bank acted as the lead structuring institution, mobilising private-sector investment while managing project risks.
The financing is supported by parallel lenders, including the Japan Bank for International Cooperation and commercial banks under guarantee from Nippon Export and Investment Insurance.
Indonesia has the world’s largest geothermal reserves, estimated at 23.1 gigawatts, but currently utilises only a fraction of this capacity. To address this, the government has prioritised geothermal energy as part of its renewable energy strategy, aiming to reduce greenhouse gas emissions and increase energy security.
Jiro Tominaga, ADB’s Country Director for Indonesia, stated that advancing geothermal projects requires collaboration between public and private sectors to overcome challenges and support clean energy goals.
SEML President Director Nisriyanto., “This project not only strengthens our renewable energy portfolio but also contributes to the local economy by creating jobs and fostering community development.”
This project represents a step forward in harnessing Indonesia’s geothermal potential and supporting its clean energy objectives.
