Minister issues new regulation on geothermal funds

Minister of Finance Sri Mulyani Indrawati has recently issued new Ministerial Regulation No 62/PMK.08/2017 on the management of geothermal funds by state-owned infrastructure fund company PT Sarana Multi Infrastruktur (SMI).

The ministry said in a statement obtained Wednesday that according to the new regulation, issued on May 12, SMI can distribute the funds in the form of loans or equity participation in geothermal power plant projects, based on commercial terms.

The statement said that the funds can also be allocated to help finance geothermal exploration activities, based on special assignment from the minister of finance.

The statement said that banks generally have avoided funding for geothermal exploration activities due the high risk. But the presence of the SMI funds in exploration activities hopefully could improve the bankability of the projects, thus helping to lure funding from banks and investors to develop geothermal power plants, the statement said.

Editing by Reiner Simanjuntak