The Global Trends in Renewable Energy Investment 2018 report, published on April 5th by UN Environment, the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance, recorded mixed results for the geothermal energy sector.Geothermal project financing decreased by 36% between 2016 and 2017, with $1.4 billion invested, the lowest level for four years. Some 11 significant projects reached financial close last year, with Indonesia and the Netherlands accounting for three projects each.
Indonesia’s Supreme Energy Muara Laboh Geothermal Plant Phase I, with 80 MW of capacity and costing $600 million, was the largest geothermal project in 2017, and the 55 MW ICE Borinquen I Geothermal Project in Costa Rica for $230 million came in second place. Indonesia holds 40% of the world’s geothermal power potential, according to estimates, and the country aims to install 4.4 GW of that technology between 2017 and 2026.
Favorable regulation for geothermal development includes expedited permitting for drilling rights, although a lack of reliable mapping can hinder exploration activity.
While investor exits collapsed in 2017, private equity buy-outs quintupled to $11.2 billion – a record high. Geothermal’s 19-fold rise to $1.9 billion was largely explained by two big deals in Indonesia, both led by Star Energy Group.
It refinanced the 227 MW Star Wayang Windu Geothermal Project with $440 million in debt from an international banking consortium, and secured $309 million to buy the 647 MW Darajat Salak Star Energy Geothermal Portfolio from another group of banks.
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