JICA, JBIC to finance geothermal power development
Friday, August 31 2007 - 02:05 AM WIB
Japan International Cooperation Agency (JICA) will team up with Japan Bank for International Cooperation (JBIC) to finance the planned development of geothermal power projects with a combined generation capacity of about 2,000 megawatt in the country.
Sugiharto Harsoprayitno, the Geothermal Director at the Ministry of Energy and Mineral Resources, said in Jakarta Thursday that the government wanted several geothermal projects with a total capacity of 2,000 MW developed until 2010. The projects would require a total investment of $5 billion or $2.5 million per megawatt.
He said that JICA was currently studying the master plant of the projects including their locations. According to him, the two agencies would provide the funding in the form of soft loan to develop the projects.
"As the funds will be in the soft loan, it is not necessary for the government to guarantee the loans," he said.
According to him, prices remain the main obstacle for geothermal project development in Indonesia.
"JICA wants the prices of electricity from the geothermal power plants be set at higher than 5 U.S. cents per Kwh, if they (contractors) also handle the upstream activities of the project. Therefore, we shall handle the upstream activities, so that the electricity price could be lower than 5 cents (per Kwh). After finishing the upstream activities, the government will auction off the projects. The government will use the soft loans to finance the upstream activities," he said.
Sugiharso also said the World Bank will provide $4 in grant for the government to carry out a policy study related to the development of geothermal power in the country.
"We will get the grant in October this year," katanya. (Bernard)