Indonesia:

Ministry to Get Tough on Geothermal Investors (The Jakarta Post)

(Courtesy CIA.gov)

Investors winning government tenders to build geothermal power plants will be required to provide surety bonds as guarantees that they carry out the projects according to agreed plans, an Energy and Mineral Resources Ministry official said.

“Under the regulation, the winners will be required to provide a certain amount of money as a guarantee, depending on their exploration commitments,” the ministry’s geothermal director Tisnaldi said in Jakarta on Tuesday.

Tisnaldi said a regulation on the surety bond requirement was being prepared. The investors would have to provide a financial guarantee of US$10 million for each geothermal well they explored, he added.

“The money will be put in an appointed bank and held for three years. They can withdraw their money gradually to fund exploration work, but they will lose their money if they don’t carry out exploration projects in three years,” Tisnaldi said.

The financial guarantee, which is commonly known as a surety bond, is part of the government’s attempts to optimize geothermal projects, some of which have been halted due to a lack of commitment from tender winners.

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