I

n a bid to expand its business into electricity generation, state-owned geothermal producer PT Geo Dipa Energy said Monday that it needed additional capital of around US$600 million.

The company’s president director, Praktimia Semiawan, said in Jakarta on Monday that the funds would be allocated to finance the development of new geothermal power plants in Dieng in East Java and Patuha in West Java.

“We want to construct geothermal power plants in Dieng with a total capacity of 110 megawatts and in Patuha with the same capacity.

The cost at each location will be around $300 million, so we need $600 million in additional capital in total,” she told House of Representatives Commission VII overseeing energy in Jakarta.

The power plants will tap geothermal wells in Dieng and Patuha, which are estimated to have capacities of 800 megawatts and 400 megawatts each, respectively. The construction of the new plants was scheduled to begin next year.

The company operates a 60-megawatt power plant in Dieng, which taps 13 wells, and a 55 megawatt plant in Patuha that has nine wells.

Praktimia said the company was considering raising the $600 million funds from local and international financial institutions.

“The funds may come from international or local banks. We’re now in talks with several institutions like Germany-based KFW banking group, Japan Bank for International Corporation [JBIC], the Asian Development Bank [ADB], Bank Mandiri, Bank Negara Indonesia [BNI] and Bank Rakyat Indonesia,” she told reporters after the hearing session.

In the hearing, Finance Minister Agus Martowardojo said that because state oil and gas firm PT Pertamina, which owns a 67 percent stake in Geo Dipa valued at Rp 442.52 billion ($51 billion), had handed over its ownership to the government, Geo Dipa was currently a state-owned enterprise. The remaining 33 percent share is owned by state electricity utility PT PLN.

Minister Agus said he hoped that as a state company Geo Dipa would have an easier time raising capital from third parties, and concurrently it would have a better chance of reaping higher profits.

Geo Dipa’s assets, which stood at Rp 2 trillion this year, are projected to increase to Rp 6.5 trillion in 2015.

The Finance Ministry has set a target of the company’s profits reaching Rp 10 billion in 2012, 60 billion in 2013, 100 billion in 2014 and 110 billion in 2015.

Geo Dipa currently sells all of its electricity to PT PLN.

To develop the utilization of geothermal energy in power generation, the government issued a ministerial decree ordering PLN to purchase electricity from geothermal producers at a ceiling price of 9.7 cents per kilowatt-hour.

Indonesia, which is home to hundreds of active and extinct volcanoes, is estimated to have a geothermal potential of around 28,000 megawatts, or 40 percent of the world’s potential.