Indonesia Geothermal Resource Risk Mitigation Project

Harnessing geothermal energy development to help reduce greenhouse gas emissions while meeting electrification needs in Indonesia.

As an emerging economy with a goal to reach 99.7 percent national electrification by 2025, Indonesia’s energy demands are increasing. The country has the world’s largest estimated potential for geothermal energy resources, but its development has been limited due to risky and expensive early-stage development costs. These barriers are further exacerbated by the geothermal tariff framework which needs to be competitive to enable private sector investment.

This project aims to help the Government of Indonesia scale up geothermal energy development by introducing a well-designed upstream risk mitigation mechanism and by promoting a conducive regulatory environment. Under this project, both public and private sector geothermal developers will have access to funds to help mitigate early stage development risks. The geothermal resource risk mitigation facility will provide contingent financing and soft loans for resource confirmation drilling.

The project has an estimated lifespan of 10 years.

The total GCF financing amount approved at B.21 was USD 100 million. Following the restructuring, the amount has been reduced to USD 44,500,000.