Jakarta – Japan Bank for International Cooperation (JBIC), as part of the Asia Zero Emission Community (AZEC) initiative, disbursed USD 500 million for Muara Laboh Unit 2 Geothermal Power Plant (PLTP) in Solok, West Sumatra.
This funding agreement, which confirms Japan’s commitment to clean energy transition in Asia, was signed at the Office of the Coordinating Ministry for Economic Affairs on Monday, May 5, during the signing of the Financial Close of Muara Laboh Geothermal Power Plant between Sumitomo Corporation, INPEX Corporation, and Supreme Energy.
“Today, the showcase project of AZEC’s cooperation is the Muara Laboh Power Plant in West Sumatra. This 88 megawatt capacity project has a value of nearly USD 500 million,” Coordinating Minister for Economic Affairs, Airlangga Hartarto, said in a press conference.
The construction of the second unit continues Indonesia’s and Japan’s commitment to strengthening low-carbon energy cooperation. The Muara Laboh project is considered strategic for increasing Indonesia’s new renewable energy (NRE) mix, which is still dominated by fossil energy.
According to Airlangga, JBIC, as the main partner, provides funding through the AZEC framework, which overall manages funds of around 35-40 billion USD to support clean energy projects in Asia.
“AZEC is an important channel for green financing. Indonesia has obtained a commitment of 500 million USD in this project,” he explained.
Not only Muara Laboh PLTP, in cooperation with AZEC, Indonesia, also encourages other green projects such as the Legok Nangka waste-to-energy power plant, the development of Sustainable Aviation Fuel (SAF), as well as the Sarulla PLTP and the Java-Sumatra electricity transmission project.
“The recent visit of the former Japanese Prime Minister also strengthens the signal that this cooperation is not only for now, but also for Asia’s sustainable energy future,” Airlangga added.
Muara Laboh Geothermal Power Plant is part of the national geothermal project portfolio worked on by a consortium between Supreme Energy, Sumitomo Corporation, and INPEX. The project has been running since Unit 1 began operating in 2019 and continues to develop Unit 2.
With an additional capacity of 88 MW, Muara Laboh geothermal plant is expected to provide electricity to hundreds of thousands of households and significantly reduce carbon emissions.
This step also strengthens Indonesia’s target to achieve net-zero emissions by 2060, with geothermal becoming one of the main pillars in the energy sector decarbonisation strategy. (Hartatik)
Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)
