ADB Reaffirms Commitment to Indonesia’s Geothermal Future with $180 Million Boost for Clean Energy Development
The Asian Development Bank (ADB) has once again demonstrated its steadfast commitment to advancing renewable energy in Southeast Asia, approving a $180 million loan to support PT Geo Dipa Energy (GDE)
Indonesia’s state-owned geothermal company — in scaling up geothermal electricity generation across Java Island.
This funding marks the second additional financing under the Geothermal Power Generation Project, which focuses on constructing and commissioning two geothermal plants, each with a capacity of 55 megawatts. These facilities will contribute much-needed base-load power to the Java–Bali electricity grid, reducing carbon dioxide emissions by over 550,000 tons annually — a significant step toward Indonesia’s decarbonization goals.
> “ADB is pleased to partner with the Government of Indonesia in advancing the country’s sustainable energy transition,” said Jiro Tominaga, ADB Country Director for Indonesia. “PT Geo Dipa Energy plays a catalytic role in driving the next phase of geothermal development. We look forward to continuing our close collaboration to expand Indonesia’s geothermal capacity and accelerate the shift toward a cleaner, more resilient energy future.”
Despite Indonesia’s enviable geothermal potential — 29 gigawatts, the largest in the world — only 2.1 gigawatts of this capacity has been tapped so far. The main barriers include high exploration costs, long project durations, and financial risk. Through this initiative, ADB aims to help overcome these challenges by strengthening GDE’s technical and financial capabilities while promoting government-supported drilling to attract private investment.
The project isn’t just about power generation — it’s about empowerment. GDE’s community strategy integrates gender-sensitive approaches, supporting women-led small businesses, scholarships, and initiatives that foster gender balance across its workforce and contractors. This reflects a broader vision where geothermal energy becomes a force not only for sustainability but also for social inclusivity.
In 2023, ADB had already provided a $10 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM) to incorporate advanced technology at the Patuha Unit 2 power plant. This innovation-driven approach highlights how ADB leverages partnerships to integrate cutting-edge solutions into geothermal infrastructure.
For Indonesia, this renewed financial injection represents more than just an energy project — it is a symbol of transition, steering the nation toward a low-carbon, resilient future while ensuring energy access remains reliable and sustainable.
As ADB continues to collaborate with governments, private investors, and development partners, projects like this serve as cornerstones of Southeast Asia’s clean energy revolution, showing how regional cooperation and financial innovation can transform geothermal potential into national prosperity.
Source: Asian Development Bank
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