Indonesia Powers Ahead: PT SMI and Ormat Forge Strategic Alliance to Finance Geothermal Exploration”

Indonesia Powers Ahead: PT SMI and Ormat Join Forces to Finance Geothermal Exploration

By: Robert Buluma
Jakarta, September 17, 2025 Indonesia has taken another decisive step toward achieving energy independence and sustainability. PT Sarana Multi Infrastruktur (Persero) (PT SMI), in partnership with PT Ormat Geothermal Indonesia , has announced plans to explore potential financing for geothermal energy exploration in Wapsalit, Maluku and Toka Tindung, North Sulawesi.

The signing of the Memorandum of Understanding (MoU) took place on the sidelines of the Indonesia International Geothermal Conference and Exhibition (IIGCE) 2025 at the Jakarta International Convention Center, witnessed by the Minister of Energy and Mineral Resources, Bahlil Lahadalia. The MoU was formalized by Reynaldi Hermansjah, President Director of PT SMI, and Dion Murdiono, President Director of PT Ormat Geothermal Indonesia, alongside senior executives Sarana Multi Infrastruktur (Persero) (PT SMI) both organizations and Ormat Technologies.

Driving Indonesia’s Energy Transition

This collaboration strongly aligns with President Prabowo Subianto’s Asta Cita vision, which prioritizes energy, food, and industrial independence. By developing geothermal power, Indonesia aims to reduce its reliance on fossil fuels while accelerating the transition to clean energy.

“Through sustainable infrastructure financing, we are committed to accelerating the transition to renewable energy, a key initiative in the government’s Asta Cita. This not only supports environmental sustainability but also creates new jobs and improves people’s welfare,” said Reynaldi Hermansjah, President Director of PT SMI.

Risk-Sharing Through GREM

To tackle the financial challenges of geothermal exploration, PT SMI is exploring initial funding through the Geothermal Resource Risk Mitigation Program (GREM), in collaboration with the World Bank. This facility provides financing during the riskiest exploration phases, using a risk-sharing approach to protect developers and financiers from potential geological and political risks.

As Indonesia’s only financing institution providing integrated support from survey through development, PT SMI is positioning itself as a key enabler of the country’s clean energy transformation.

Ormat’s Global Expertise

For PT Ormat Geothermal Indonesia, part of Ormat Technologies Inc, this partnership represents a continuation of its long-standing global leadership in geothermal development.

“Indonesia has tremendous potential to become a renewable energy leader in Southeast Asia. Through our collaboration with PT SMI, we fully support the government’s green investment agenda by bringing our technology and expertise to the table,” said Dion Murdiono, President Director of PT Ormat.

Building on Previous Success

PT SMI has already supported several renewable projects, including the Ijen Geothermal Power Plant (PLTP) in Banyuwangi, inaugurated by President Prabowo in June 2025. That plant is part of Indonesia’s strategy to raise the renewable energy mix from 9% to 23% by 2025, in line with the National Medium-Term Development Plan (RPJMN).

As of July 2025, PT SMI has disbursed Rp25.87 trillion in committed financing across 139 renewable energy projects and one Light Rail Transit project. These investments have avoided around 4 million tons of CO₂ emissions, with a potential carbon credit equivalent of USD 14 million. Importantly, since 2018, PT SMI has placed a moratorium on coal financing, redirecting its focus entirely to clean energy development.

A Blueprint for Future Collaboration

This MoU between PT SMI and PT Ormat is more than just a financing agreement—it’s a blueprint for how governments, financial institutions, donors, and private companies can collaborate to de-risk geothermal exploration and accelerate the adoption of renewable energy.

By combining financing innovation with world-class geothermal technology, Indonesia is positioning itself at the forefront of Southeast Asia’s green energy revolution.

Source : Asian Power

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