Panax welcomes planned further increase of geothermal incentives

(26 June 2012) -- Panax Geothermal Limited has welcomed confirmation that the Indonesian Government is planning further increases of incentives for geothermal investment in Indonesia.

Indonesia?s Energy and Mineral Resources Ministry proposes to increase the current US$97/MWh feed-in tariff by at least 24 per cent.

The proposals before the Ministry will increase the tariff either to a flat rate of US$125 per megawatt hour (up from $US97/MWh), or to US$120/MWh for developments close to the national transmission grid and US$145/MWh for projects on smaller Indonesian islands or with limited access to infrastructure.

Panax Geothermal Managing Director Kerry Parker said Indonesia?s increasing commitment to geothermal energy investment was a demonstration of growing endorsement of the position that Panax has taken in the Indonesian geothermal sector.

?Indonesia is creating investment confidence and certainty for its renewable energy industry,? Parker said.

?This increase is the latest in a long list of recent investment incentives being offered by Indonesia for renewable energy projects, ensuring increased energy security for the country?.

?Whichever feed-in tariff proposal is approved, we expect the new arrangements will likely benefit each of Panax?s current Indonesian projects ? Sokoria, Dairi Prima, and Ngebel, and will provide greater financial returns for additional projects that Panax is currently reviewing?.

Panax has been reaping the benefits of Indonesia?s support, with this latest announcement closely following the successful negotiation of power purchase agreements between the company and Indonesian energy and government representatives.

Each of Panax?s Indonesian projects, Sokoria, Ngebel and Dairi Prima, are underpinned by agreed, commercially attractive power tariffs with power offtake arrangements in line with the awarded terms of the tender for each of the project. (ends)