ADB inks $109m financing for clean energy venture in Indonesia

ADB inks $109m financing for clean energy venture in Indonesia

The Asian Development Bank (ADB) signed on January 26, 2017 a new $109
million financing package for the Muara Laboh geothermal power generation
project, a clean energy venture in western Indonesia.

This financing is part of ADB's efforts to scale up private sector-led
infrastructure development in Asia and the Pacific and boost support for
clean energy. The plan was approved in December 2016.

A project of PT Supreme Energy Muara Laboh, the Muara Laboh geothermal
facilities is located in West Sumatra in Indonesia targeted to generate 80
megawatts of electricity. Indonesia contains about 40 per cent of the
world's geothermal reserves, a significant resource for the country to
achieve its commitments to reduce carbon dioxide emissions by 29 per cent by
2030.

According to the Manila-based regional bank, the project brings together an
important set of geothermal project developers and financiers. PT Supreme
Energy Muara Laboh is a joint venture consisting of the Indonesian
geothermal power developer PT Supreme Energy, Japanese trading and
investment company Sumitomo Corporation, and global energy leader ENGIE.

Yuichiro Yoi, senior investment specialist of ADB's private sector
operations department, said the project reflects Indonesia's commitment to
meet increasing demand for electricity and support the development of
renewable energy.

"This transaction proves that the private sector will play a critical role
in helping the country achieve both of these targets," Yoi said.

The geothermal project will be one of the first transactions to receive
funding from ADB's newly established $1.5 billion fund called Leading Asia's
Private Infrastructure Fund (LEAP). It is capitalized in equity from Japan
International Cooperation Agency (JICA), and is managed by ADB's private
sector operations department. Over $200 million of LEAP funds have been
allocated, with the Muara Laboh approval and other recent LEAP financings
included.

The assistance is funded by a $70 million loan from ADB's own capital and a
$19 million participation from the Clean Technology Fund (CTF), which
provides middle-income countries with highly concessional resources to scale
up low-carbon technologies. CTF is one of the two funds comprising the World
Bank's Climate Investment Funds.

In addition to ADB, financing is being provided by the Japan Bank for
international cooperation and a set of commercial banks under a guarantee
from Nippon Export and Investment Insurance.

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Link to Original Article:
http://www.dealstreetasia.com/stories/adb-inks-109m-financing-for-clean-ener
gy-venture-in-indonesia-63698/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com