Tender: Indonesia Geothermal Technical Advisory Services to Accelerate World-Class Project Development

Unlocking Indonesia’s Geothermal Future: Inside the AFD Call for Technical Advisory Services

Image: This is the Salak Geothermal Power Plant located in West Java, Indonesia, operated by Star Energy Geothermal.

Indonesia sits at the center of the global geothermal map. Despite holding the world’s largest geothermal reserves, only a small portion has been developed. Now, a major opportunity has emerged under the Agence Française de Développement (AFD): a call for Geothermal Technical Advisory Services aimed at accelerating project development across the country.

This 18-month framework agreement, expected to begin in July 2026 with submissions due by June 26, 2026, is more than a consulting contract. It is a strategic instrument supporting Indonesia’s energy transition under the Just Energy Transition Partnership (JETP), and a key lever in unlocking the country’s vast geothermal potential.

Indonesia’s Geothermal Advantage: A Sleeping Giant of Energy

Indonesia lies along the Pacific Ring of Fire, giving it one of the most geothermal-rich geologies on Earth. Estimates place its conventional geothermal potential at roughly 23–29 GW, or nearly 40% of global reserves. When deeper and unconventional resources are included, the theoretical potential rises into the hundreds or even thousands of gigawatts.

Yet actual development remains modest. Installed capacity is only about 2.3–2.6 GW, concentrated in fields across Sumatra and Java such as Sarulla, Salak, Kamojang, Darajat, Ulubelu, and Wayang Windu.

That means less than 10% of identified resources are currently utilized.

Government targets reflect the urgency:

~7.2 GW by 2025
Over 9 GW by 2030

These ambitions are driven by rising electricity demand, coal dependence, and Indonesia’s climate commitments under the Paris Agreement.

Geothermal energy is especially valuable for Indonesia because it delivers stable baseload power, unlike variable solar and wind. It also supports industrial decarbonization, direct-use heat applications, and regional economic development in volcanic zones.

The Policy Engine: JETP and the Indonesia Energy Transition Framework

The tender sits within a broader policy ecosystem led by the Just Energy Transition Partnership (JETP), launched in 2022. Under JETP, international partners committed around $20 billion to support Indonesia’s shift away from coal toward cleaner energy systems.

Key targets include:

Capping power-sector emissions at ~290 MtCO₂e by 2030
Achieving at least 34% renewable energy in electricity generation by 2030
Reaching net-zero emissions in the power sector by 2050

Supporting this is the Indonesia Energy Transition Facility (IETF), a technical assistance program co-financed by European partners and AFD. It provides expertise for project preparation, policy design, and implementation support for state utilities and energy stakeholders.

The geothermal advisory tender is one of the flagship technical support mechanisms under this framework, designed to bridge the gap between resource potential and bankable projects.

What the Tender Actually Covers

The AFD call seeks experienced consultants or consortia capable of supporting geothermal development across multiple stages of project preparation and evaluation.

Core responsibilities include:

Technical screening of geothermal prospects
Due diligence and review of feasibility studies
Support in drilling strategies and reservoir assessment
Assistance in drafting technical procurement documents and terms of reference
Review of surface and subsurface development plans
Advisory support for project preparation under the IETF framework

The assignment also extends beyond engineering. It requires integration of environmental safeguards, social considerations, and alignment with broader just transition goals, including workforce transition from coal-dependent sectors.

The framework will run for 18 months, beginning mid-2026, with flexible deployment of multidisciplinary expert teams depending on project needs.

Persistent Challenges in Indonesia’s Geothermal Development

Despite strong policy backing, geothermal development in Indonesia has faced structural barriers:

1. High Upfront Risk

Exploration and drilling are capital intensive and uncertain. A single unsuccessful well can result in significant financial losses.

2. Regulatory Complexity

Permitting, land access, and forestry regulations often slow project timelines, although reforms are gradually improving conditions.

3. Financing Constraints

Early-stage geothermal projects struggle to attract financing due to resource risk and historically conservative tariff structures.

4. Technical Capacity Gaps

Advanced reservoir modeling, deep drilling technologies, and next-generation geothermal systems remain limited in domestic capability.

5. Environmental and Social Sensitivities

Projects are often located near protected ecosystems or communities with strong land-use concerns, requiring careful stakeholder engagement.

The AFD advisory mechanism is designed specifically to address these bottlenecks by improving project preparation quality and reducing early-stage uncertainty.

Why This Opportunity Matters for Consultants

For engineering firms, geothermal specialists, and advisory consortia, this tender represents a strategic entry point into one of the world’s most dynamic energy markets.

Key advantages include:

Direct engagement with major international development partners
Exposure to multiple geothermal projects across Indonesia
Opportunities for long-term follow-on work with national utilities and developers
Participation in climate-aligned infrastructure with measurable impact
Strong demand for expertise in reservoir engineering, drilling, and project structuring

Firms with experience in geothermal regions such as Iceland, the Philippines, Kenya, or New Zealand will find their expertise especially relevant.

Broader Impact: Beyond Advisory Services

If effectively implemented, this technical advisory framework could significantly accelerate Indonesia’s geothermal pipeline. Improved feasibility studies, stronger project structuring, and better risk assessment could unlock delayed or stalled developments.

The downstream impact is substantial:

Increased renewable energy share in the grid
Reduced reliance on coal-fired generation
Improved energy security across the archipelago
Industrial decarbonization, especially in energy-intensive sectors
Job creation in construction, drilling, and operations

Looking further ahead, emerging technologies such as enhanced geothermal systems could expand the resource base far beyond current estimates, positioning Indonesia as a global innovation hub in geothermal energy.

Preparing a Strong Bid

Organizations interested in participating should focus on:

Building multidisciplinary teams combining engineering, geology, and project finance expertise
Demonstrating proven geothermal development or advisory experience
Incorporating ESG and just transition frameworks into project approaches
Showing familiarity with Indonesia’s regulatory and geological landscape
Preparing early to meet the June 26, 2026 submission deadline

Conclusion: A Defining Moment for Indonesia’s Geothermal Path

The AFD Geothermal Technical Advisory Services tender is a critical piece in Indonesia’s energy transition puzzle. It aims to transform geothermal potential into investable, executable projects through high-level technical support.

For Indonesia, it is a step toward unlocking a cleaner and more resilient energy system. For consultants, it is a rare opportunity to shape one of the most significant geothermal expansions in the world.

As global energy systems shift toward low-carbon baseload solutions, Indonesia’s geothermal sector is no longer just a national resource story—it is becoming a global benchmark.

The groundwork is being laid now. The expertise mobilized through this tender may determine how quickly that potential becomes reality.

Click This Link To Bid

Source: Afd, LinkedIn

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