Wave of Geothermal Financing
In our previous post, we mentioned that financing and investment remain key challenges in the geothermal sector. As a consulting firm, our focus lies in advancing the potential of geothermal projects through technical and engineering. Yet, we also recognize that the strength of Indonesia’s energy transition depends not only on resource potential, but on how effectively finance, policy, and engineering can align to de-risk projects and accelerate implementation.
In recent months on the 3rd quartal of the year, we’ve seen a wave of financing commitments flowing into Indonesia that will drive Indonesia geothermal ambitions. These 3 major moves we see as a strong signal:
1. Danantara Indonesia, the new sovereign investment fund, is taking a proactive role in accelerating geothermal development by facilitating a Head of Agreement (HoA) and MoU between PGEO and PLN Indonesia Power for the joint development of 19 geothermal projects (530 MW). The collaboration also explores low-interest financing options, including the potential “Patriot Bond,” to strengthen funding access and speed up Indonesia’s energy transition
2. Bank Negara Indonesia (BNI) has formalized a green financing agreement with PT Geo Dipa Energi (Persero), providing a credit and trade facility to support up to 500 MW of geothermal capacity. This move signals a strong step toward aligning the banking sector with Indonesia’s national energy transition goals.
3. ADB has approved a US$180 million loan for PT Geo Dipa Energi (Persero) to complete the construction and operational testing of two geothermal power units on Java Island, each with a capacity of 55 MW. This continued support from ADB reflects strong international confidence in Indonesia’s geothermal sector. It also emphasize the role of multilateral financing in advancing the country’s clean energy and energy transition goals.
These ongoing collaborations across various sectors are set to accelerate Indonesia’s geothermal development in line with the national strategic plan.
The question now is: could Indonesia surpass the United States and become the world’s leading geothermal producer? Or have we missed any recent geothermal financing news in Indonesia?
