Winfried Wicklein, country director for Indonesia at the Asian Development Bank (ADB), talks to TOGY about how Indonesia’s LNG and upstream opportunities can be made more attractive and prospects for its geothermal drive. ADB supports the energy industry in Indonesia by financing private-sector projects, working with PLN on power projects and engaging on policy and regulatory reform.
"ADB has supported the geothermal sector by funding projects such as the 330-MW Sarulla plant; the 80-MW Muara Laboh plant; and the 90-MW Rantau Dedap project, which was approved last year. We are also working with state-owned companies to ensure that Indonesia can develop all designated working areas as soon and effectively as possible.
Despite the general push for non-conventional energy, the geothermal sector has slowed down in the last 12-18 months. Here, pricing may be an important factor. Depending on location, current electricity pricing caps linked to the average generation cost would impact the financial viability of projects, especially in the renewable energy space.
However, we are seeing some promising developments on the financing front. For instance, PT SMI, with support from the World Bank and the Green Climate Fund, has launched a de-risking mechanism for geothermal projects which should help mitigate exploration risks."
