PGEO’s 4 Geothermal Units Secure $613M World Bank Funding

Major Geothermal Projects of Pertamina Geothermal Energy (PGEO) Set to Secure US$613 Million (Rp10.18 Trillion) Funding from World Bank, ADB, and Others

By:Robert Buluma

Four flagship geothermal projects of PT Pertamina Geothermal Energy (PGEO) have entered Indonesia’s 2025-2029 Blue Book, opening the door to US$613 million (Rp10.18 trillion) in concessional loans from World Bank, ADB, JBIC, and JICA. The projects will add 215 MW of clean energy and boost local economies.

Indonesia, sitting on the Pacific Ring of Fire, possesses the world’s largest geothermal reserves nearly 24 GW of proven potential. Yet only about 2,300 MW has been tapped so far. That is about to change in a big way.

On December 4, 2025, PT Pertamina Geothermal Energy Tbk (IDX: PGEO) announced that four of its major geothermal projects have officially been included in Indonesia’s prestigious Blue Book 2025-2029 compiled by Bappenas (Ministry of National Development Planning). This inclusion unlocks access to US$613 million (approximately Rp10.18 trillion) in highly concessional international financing from institutions including the World Bank, Asian Development Bank (ADB), Japan Bank for International Cooperation (JBIC), and Japan International Cooperation Agency (JICA).

This is one of the largest single geothermal financing packages ever lined up in Southeast Asia and a massive vote of confidence in Indonesia’s clean-energy transition.

Why the Blue Book Matters

The Blue Book lists nationally strategic projects that are eligible for foreign loans and grants on favorable terms. Being listed dramatically improves project bankability by offering low-interest, long-tenor loans through Indonesia’s Subsidiary Loan Agreement (SLA) mechanism. According to PGEO’s Director of Exploration & Development, Edwil Suzandi, this structure can improve each project’s internal rate of return (IRR) by 1–3 percentage points, making previously marginal projects highly attractive.

Total investment across the four projects exceeds US$1.09 billion. The US$613 million in concessional funding covers more than half the cost, significantly reducing reliance on commercial debt or equity.

The Four Game-Changing Geothermal Projects

These projects are expected to come online progressively between 2029 and 2032,delivering a combined 215 MW of firm, 24/7 carbon-free electricity.

1. Lumut Balai Unit 3 & 4 – Strengthening the South Sumatra Cluster

Located in Muara Enim regency, these two units will expand one of PGEO’s most successful existing fields (current installed capacity ~110 MW). The projects will deploy advanced binary-cycle technology to harvest lower-temperature resources, pushing overall field efficiency higher. Together they will power the equivalent of ~400,000 Indonesian households while cutting CO₂ emissions by hundreds of thousands of tons annually.

2. Hululais (Ulubelu Extension I) – Lighting Up Lampung and Beyond

The Ulubelu field in Lampung already supplies 220 MW. This 55 MW extension will help meet soaring industrial demand in southern Sumatra and could eventually feed into the planned Sumatra-Java HVDC interconnector.

3. Lahendong Unit 7–8 + Binary – Innovation in North Sulawesi

This project combines conventional flash technology with a binary unit that recovers waste heat, achieving utilization rates above 95%. The site is also exploring direct-use applications such as greenhouse agriculture and tourism (hot-spring resorts), creating diverse revenue streams.

Beyond Megawatts: Economic Multiplier Effects

Edwil Suzandi emphasized that these projects go far beyond electricity generation:

Direct creation of thousands of skilled jobs during construction and hundreds of permanent jobs.

Strong local economic stimulus through procurement of Indonesian goods and services (IKN-level local content targets).

Increased regional tax and non-tax revenues for South Sumatra, Lampung, and North Sulawesi provinces.

Technology transfer and workforce upskilling in high-tech drilling, reservoir management, and binary-cycle operations.

Next Steps Toward Financial Close

PGEO is now entering detailed negotiations with the multilateral lenders to finalize interest rates, grace periods, tenors (likely 20–40 years), and environmental & social safeguards. Simultaneously, the company is working with Pertamina, Bappenas, and the Ministry of Finance to meet all “readiness criteria” required to graduate the projects into the Green Book, giving full access to climate-finance instruments.

Investor Takeaway

For stock market watchers, PGEO shares jumped nearly 6% in the two sessions following the announcement, reflecting strong market confidence. Analysts see the Blue Book inclusion as a major de-risking event and a catalyst for further capacity expansions. PGEO maintains an ambitious internal target of developing 3 GW of owned geothermal capacity in the coming decade , more than doubling Indonesia’s current total installed geothermal base.

Conclusion

The US$613 million international funding package for PGEO’s four flagship projects is more than just finance it is a powerful signal that Indonesia is serious about becoming a geothermal superpower. By blending national strategic priorities with world-class concessional capital, these 215 MW of new clean, baseload power will accelerate the country’s journey toward net-zero 2060 while delivering jobs, growth, and energy security along the way.

Source: Market Business

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