Landmark projects in Indonesia and the Philippines are paving the way, but investor and regulatory roadblocks remain.
Geothermal energy remains largely a sleeping giant due to roadblocks affecting and coming from various stakeholders. For Michael Barrow, director general of the private sector operations department of the Asian Development Bank, an obstacle for geothermal development is that private players are more exposed to risks that may not be attractive or even feasible for any businesses. He cited Indonesia as an example, explaining that private sector investors in a project are responsible for exploring and maintaining geothermal wells and are, therefore, fully exposed to geothermal risks.
This also applies to lenders like ADB, according to Barrow. “This means that, as lenders, we need to pay special attention to geothermal-specific risks on top of the usual construction/operation and maintenance risks for the power plant hardware,” he said.