Panax says to benefit from new geothermal guarantee

By Demas Simbolon

Australian-listed firm Panax Geothermal Limited said it would benefit from the Indonesian government's recently announced new guarantee to protect geothermal projects during exploration and construction, and to expedite foreign investment in geothermal energy.

Panax Managing Director Kerry Parker said in a press statement on Wednesday that the guarantee came on top of the Indonesian Government?s guaranteed feed-in tariff for geothermal energy, which all are the strongest signal yet that Australia will be left playing catch-up to Indonesia in renewable energy policy.

The government guarantee supports financier funding and independent power producer purchase agreements for power generation projects undertaken by Indonesia ?s state utility company, PT PLN (Persero). The Indonesian government will be guaranteeing the payment obligations of PT PLN, providing strong investment security to investors and lenders.

Parker said the Australian Government needed to recognize the opportunities Indonesia was creating for Australian geothermal investors and to take steps not to be left behind.

The new government guarantee came after Indonesia?s second credit rating upgrade in two months, and Panax Geothermal is reaping the benefits of its Indonesian investments.

?The improved investment confidence in the region and the new government guarantee reinforces Panax?s decision to invest in Indonesian geothermal power generation,? Parker said.

?Panax had long recognised the investment potential of the country, having launched several projects in Indonesia and with plans for further investment in the region.

?We expect to bring three zero emission geothermal generation projects in Indonesia into production over the coming years, providing much needed power for homes and industry in Indonesia," Parker said.

Editing by Benget Besalicto Tnb.