To Become a Renewable Energy Superpower, Indonesia Must Learn from Sarulla’s Example (Asian Development Bank)
Mobilizing private finance, though, can be difficult for geothermal power projects, which face high resource risks and low utility returns. Developers traditionally respond with a phased approach, financing power generation units one at a time as resources are proved. This typically translates to higher overall transaction costs for debt financing compared to larger ventures.
The 320 megawatt Sarulla Geothermal Power Development Project in North Sumatra tackled this challenge by capturing the economies of scale through a single-stage financing of three power generation units and all the associated wells. The landmark project is the key to demonstrating geothermal commercial viability in Indonesia and reigniting interest in clean energy investment.
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