Indonesia has the world’s largest potential for geothermal energy resources, but its development has been limited due to risky and expensive early-stage development costs. These barriers are further exacerbated by the geothermal tariff framework which needs to be competitive to enable private sector investments.
This project aims to help the Government of Indonesia scale up geothermal energy development by introducing a well-designed upstream risk mitigation mechanism and promoting a conducive regulatory environment. By developing geothermal resources, the project is anticipated to avoid 102.2 million tonnes of CO2 within the span of 10 years, while at the same time fulfilling electrification needs.
Under this project, geothermal developers from both public and private sectors will have access to funds to help mitigate early stage development risks. The geothermal resource risk mitigation facility will provide contingent financing and soft loans for resource confirmation drilling.