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Indonesia to double geothermal capacity

A new climate investment fund plan will double the capacity of geothermal energy in Indonesia.

"Indonesia has the largest geothermal energy potential in the world,” explains Katherine Sierra of the World Bank. “The co-financing will help Indonesia reduce the use of fossil fuels to meet its rapidly growing energy needs. It also gives a clear signal on the practical actions developing countries can take to combat global climate change.”

The US$400 million plan, endorsed by the Trust Fund Committee of the Clean Technology Fund (CTF), will transform Indonesia's use of renewable energy, including geothermal, and support the Government’s long-term goal of reducing GHG emissions by 26% by 2020.

The plan will use co-financing from the multilateral CTF to expand large-scale geothermal power plants and to accelerate initiatives to promote renewable energy and energy efficiency by creating risk-sharing facilities and addressing financing barriers to small- and medium-scale investments.

Funding leverages additional support from others

Under the plan for Indonesia, the CTF will mobilise an additional US$2.7 billion from a range of other sources.

"The greater availability of power supplies will help the government of Indonesia reach its objective of providing electricity access from the present 65% of the population to 90% by 2020," says Ursula Schaefer-Preuss of the Asian Development Bank (ADB). “Through the utilisation of a cleaner fuel source, geothermal development will also result in better health benefits and more energy access for poor people.”

Indonesia is the fourth country in Asia to have a CTF-funded investment plan for the deployment of low-carbon technologies such as geothermal endorsed by governments. The other countries are the Philippines, Thailand and Vietnam.

The Trust Fund Committee's endorsement of Indonesia's plan raises the level of CTF support to Asia to US$1.2bn, mobilising a total of US$13bn from government, private sector, and other sources.

Other countries receive CTF funding

In addition to the endorsement of the plan for Indonesia, the CTF recently endorsed plans for Colombia (US$150m from CTF, leveraging an additional US$2.85bn from other sources), Kazakhstan (US$200m, leveraging US$1.1bn) and Ukraine (US$350m from CTF, leveraging US$2.3bn).

The four endorsements bring the total of CTF-funded Investment Plans to 13. Egypt, Mexico, Morocco, South Africa and Turkey have plans endorsed and are in the process of developing and implementing projects, while five countries in the Middle East and North Africa have undertaken a US$750m regional plan for scaling up concentrated solar power.

About the CIF

The Climate Investment Funds are financing instruments which initiate transformational change towards low-carbon and climate-resilient development through scaled-up financing channeled through the Multilateral Development Banks. The Clean Technology Fund finances low-carbon technologies for significant GHG reductions within country investment plans; and the Strategic Climate Fund finances targeted programs in developing countries to pilot new climate or sectoral approaches with scaling-up potential.

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Geothermal  •  Policy, investment and markets