The Asian Development Bank (ADB) has agreed to provide $92.6 million in funding to PT Supreme Energy Muara Laboh (SEML) to expand geothermal energy production in Indonesia. The project, located at Muara Laboh in West Sumatra, will include the development of a new geothermal power plant. Once completed, the plant is expected to have a generation capacity of approximately 83 megawatts (MW).
The funding package is made up of contributions from various sources. ADB is supplying $38.8 million from its regular financial resources. Another $38.8 million is coming through a syndicated loan from Sumitomo Mitsui Banking Corporation, with ADB serving as the primary lender. An additional $15 million is being provided as a concessional loan from the Australian Climate Finance Partnership. Further financial support for the project is being provided by the Japan Bank for International Cooperation and other commercial lenders, backed by Nippon Export and Investment Insurance.
Indonesia is home to the largest geothermal energy reserves in the world, estimated at 23.1 gigawatts (GW). However, only a small portion of these reserves has been utilized so far. The Muara Laboh expansion is part of ongoing efforts to tap into the country’s geothermal resources to meet growing energy demands while reducing carbon emissions.
ADB has been involved in several geothermal initiatives in Indonesia for over a decade. Some of the projects supported by the bank include the first phase of the Muara Laboh facility, the Rantau Dedap geothermal plant in South Sumatra, and the Sarulla geothermal power project in North Sumatra, which is one of the largest geothermal plants in operation with a capacity of 330 MW.
In addition to geothermal power, Indonesia is working on diversifying its renewable energy portfolio. Solar power projects, including small-scale installations in Java and Bali, are under development. These efforts are aimed at increasing the share of renewables in the country’s energy mix.
