Monday, July 10, 2017

Indonesia: $270 Million Fund to Finance Geothermal Exploration

Gov't Lays Groundwork for Geothermal Exploration Fund (Jakarta Globe)

Indonesia has laid the groundwork for a $270 million fund to finance geothermal exploration, as part of the country's efforts to boost renewable sources of energy.

The government has allocated Rp 3 trillion ($224 million) in the 2017 state budget for the so-called Government Drilling Fund, which will be used to finance geothermal exploration around Indonesia.

The Washington-based World Bank will also chip in with a $55.25 million loan to shore up the fund.

Sarana Multi Infrastruktur, the government's infrastructure investment arm, will be responsible for managing the fund under supervision of the ministries of finance and energy.

Indonesia has about 29 gigawatts of geothermal capacity – the largest in the world – but high exploration costs and the risks involved often prove prohibitive for investors in the sector.

Rida Mulyana, director general of renewable energy and energy conservation at the Ministry of Energy and Mineral Resources, said the fund will help reduce exploration risks borne by geothermal producers.

Under the scheme, the government will conduct a survey of potential geothermal resources and drill exploration wells, activities that are usually capital intensive.

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