I

ndonesia will receive a US$500 million loan from the Asian Development Bank (ADB) to set up three geothermal power plants with a total capacity of 165 megawatts, a senior official says.

Djajang Sukarna, the secretary of the alternative and renewable energy and energy conservation directorate general at the Energy and Mineral Resources Ministry, said Wednesday that the power plants would be constructed in Sungaipenuh in Jambi, Karaha, in West Java, and Mataloko in East Nusa Tenggara.

“We’ll sign the deal in late 2011 and start the constructions of those power plants next year,” he told reporters on the sidelines of a meeting with the ADB and National Development Planning Agency (Bappenas).

He said that Pertamina Geothermal Energy (PGE), a subsidiary of state oil and gas firm Pertamina, would handle upstream operations at the Sungaipenuh Power Plant, while state electricity company PT PLN would handle downstream operations.

“At the Karaha Power Plant, all businesses will be operated by the PGE. For the Mataloko plant, PLN will take full control,” said Djajang.

PLN renewable energy division head Muhammad Sofyan, who also attended the meeting, said that the $500 million loan could cover 80 percent of the funds required to build the power plants, the remaining 20 percent would come from PLN’s budget.

He continued that in Sungaipenuh, the company actually planned to build two power plants with a total capacity of 25 megawatts respectively, but since the prepared location for one of those plants was located in a conservation area, his company decided to build one plant first.

“For the Mataloko power plant, PLN is now waiting for the tender process of the mining working area [WKP],” Sofyan said, adding that the power plant would have a total capacity of 5 megawatts.

To conduct the feasibility studies in the three areas, PLN had received a grant from ADB totaling $1.5 million, he revealed. He added that the three power plants were part of the second phase of the 10,000-megawatt fast-track program.

“The Sungaipenuh Power Plant is scheduled to start operating in 2015, Karaha 2014 and Mataloko 2013,” he reported.

The Energy and Mineral Resources Ministry in late February issued a ministerial decree ordering PLN to buy power from geothermal producers at a ceiling price of 9.7 cents per kilowatt-hour.

The decree will also pave the way for the resumption of 15 geothermal projects that have long been delayed due to selling price uncertainties. Those projects are also part of the second phase of the 10,000-megawatt fast-track program.

In an effort to boost investment in geothermal projects, the ministry announced last week that this year it had set aside Rp 350 billion to compensate for any failures in geothermal exploration.

The government has repeatedly affirmed its commitment to boost the utilization of alternative and renewable energies, including geothermal, to reduce the country’s dependence on fossil-based energy sources.

Currently, according to Bappenas, the utilization of alternative and renewable energy in Indonesia only represents 5 percent of the country’s total energy consumption.

— JP/Rangga D. Fadillah